How do I start in­vest­ing?

Pay Down High-Interest Short-Term Debt

Before you start investing, there are a few important steps to take in your personal finances to prepare the ground. It’s a good idea to pay down high-interest short-term debts such as overdrafts, credit card installment plans, and other consumer loans before you begin investing. Once that is done, it’s wise to have a small emergency fund to cover unexpected expenses.After that, it’s important to invest only money you can afford to lose at the beginning. We don’t say this because you are likely to lose it, but so you can learn about investing without unnecessary worries and gradually become familiar with the process and the environment.

Don’t Put All Your Eggs in One Basket

• Diversify your portfolio across more than one company or investment fund.

• Invest in things you understand. Seek knowledge and familiarize yourself with the companies you are considering investing in.

• Subscribing to an investment fund can be a smart way to enter the market. Your money is then placed in a fund managed by professionals. This lowers the requirement for you to know the market inside and out, while still allowing you to participate.

• Gain knowledge and discuss investing with friends, colleagues, and family.

• Set goals for your investments. Are you aiming for short-term returns, or do you want your money to grow over a longer period?

• Always keep an overview of your assets and your risk tolerance.

The First Step: Open a Custody Account

Once you have familiarized yourself with the market and set your investment goals, it’s time to invest your actual funds. You do this by going into your online bank or banking app and opening a custody account. A custody account functions like a bank account for investments in funds and for buying and selling stocks and bonds.To open a custody account, you must sign an agreement with Arion Bank regarding the handling of your investment funds and answer questions about your knowledge of securities trading.Through the custody account, you can then decide which stocks you want to buy or what types of funds you want to invest in. The most important step is the first one—remember that you don’t need large amounts of money to enter the market. One of the world’s most famous investors, Warren Buffett, started investing small amounts at a young age, and today he is one of the most successful investors in the world.

Start—and Learn From the Experience!

With good preparation, you will quickly get a sense of how you want to manage your investments. Don’t forget that what all successful investors have in common is that at some point, they decided to start and made their very first investment.Don’t fear mistakes—learn from them and try to understand why the outcome was not what you hoped for. And of course, never hesitate to seek advice or discuss investments with friends and family. You can always contact our advisors with any questions that may arise.

Practice Investing in the Dyngja App

If you are interested in investing but want to get to know the environment before taking the next step, you can try the Dyngja app. It is a mobile app that allows you to practice investing on the Icelandic stock market without taking unnecessary risk. Users can perform simulated trades on the Icelandic market using the virtual currency vISK.