My investing journey began with term deposits, progressed to mutual funds and eventually led to trading securities through a brokerage account. I started my career at a bank, which gave me early exposure to different types of investments.

Later, working in wealth management required me to become licensed, which certainly increased my knowledge. Although I am quite confident in the investment arena, I do understand why moving from traditional term deposits or mutual funds to individual securities can feel daunting, especially for young or first-time investors without clear guidance.

Over the years, people have asked me how to begin and what to buy. The second question is always trickier because selecting a security requires research and a clear understanding of the company. For new investors, I often suggest starting by researching businesses whose products or services they know and value.

For example, I am known to enjoy a cruise or two, and many years ago I invested in a cruise company. When Covid-19 hit, the share price took what could only be described as a beating, but I kept the investment for three reasons.

First, I still believed in the company and its fundamentals. Second, I doubled down and bought more shares because the price was attractive. Third, I hold enough shares to apply for shareholder credit, which becomes shipboard credit each time I cruise with the company.

That investment worked for me because I understood and genuinely liked the business. When the share price fell, I could place the decline in context because I knew how severely the pandemic had affected the cruise industry.

Emotion played a part in my decision, but familiarity was only a starting point; I did my research, ensured I was still well diversified and understood the risk associated with the investment. This is an example of my own process, not a recommendation to buy any security.

That said, if you are new to investing and want to build a stock portfolio, where should you start?

I have always believed that starting simply beats trying to start cleverly. New investors often feel pressure to find the next big stock, but wealth is usually built through less exciting habits: setting a clear purpose, choosing a sensible mix of investments, contributing steadily and remaining patient. Building a portfolio is less about predicting the market than making sound decisions and sticking with the plan.

For many new investors, exchange-traded funds are a practical way to dip a toe into the stock market. An exchange-traded fund, or ETF, is a basket of investments that trades on a stock exchange like a single share.

In that sense, ETFs sit between mutual funds and individual securities. When you buy one unit of a broad-market ETF, you may own a small slice of hundreds or even thousands of companies at once. This structure can offer several significant advantages:

• Diversification: spreading money across many companies and sectors reduces the effect that one business failure can have on the whole portfolio. Diversification cannot prevent losses when markets fall, but it helps avoid relying too heavily on a single company.

• Low cost: many index-tracking ETFs charge relatively small annual fees. Because fees are deducted year after year, keeping costs low leaves more of your return available to compound over time.

• Simplicity: an ETF can be bought and sold during the trading day, and many platforms allow small purchases. A broad fund can reduce the need to analyse the accounts of numerous individual companies, although investors should still understand what the fund owns.

• Transparency and choice: most ETFs publish their holdings, allowing you to see what you own. Funds may cover domestic and international shares, bonds, particular sectors and other asset classes. That range can make it possible to build a diversified portfolio with only a few carefully selected funds.

Not every ETF is automatically diversified or inexpensive. Some concentrate on one industry, country or investment theme, while others use complex strategies that may not suit beginners.

Before investing, review the fund’s objective, holdings, fees, trading volume and historical volatility. Also consider whether several funds overlap by owning many of the same companies. It is important to note that the label “ETF” describes the structure, not the level of risk.

Once you understand ETFs and your trading platform, you may feel confident enough to add selected individual stocks. ETFs can reduce concentration risk through diversification, so individual shares can form a smaller part of the portfolio rather than carrying the entire load.

Set a limit for any one company, such as a maximum percentage of your portfolio, and never invest money you cannot afford to leave untouched through a downturn.

Habits often matter more than picks. Investing regularly rather than waiting for the perfect moment can be a prudent approach. Contributing a fixed amount on a schedule, known as dollar-cost averaging, means you buy more units when prices are low and fewer when they are high, reducing the temptation to guess the market.

Remember that markets decline from time to time, for a variety of reasons, and that declines are a normal part of investing.

Although it is hard not to react to every news headline, some are simply noise while others may be genuine warning signs. As an investor, you need to separate fact from fiction, especially in this day and age, because either can affect your returns.

You do not need to beat the market to build a strong, diversified stock portfolio. Know your goal, understand your capacity for risk, diversify across asset classes and sectors, invest steadily and remain calm when the road gets bumpy.

Starting with a simple plan and improving it as your knowledge grows is far more valuable than waiting for a perfect strategy that may never arrive.

• Carla Seely is chief operating officer at Freisenbruch Insurance Services Ltd and has 26 years of experience in international financial services, wealth management and insurance. Her professional qualifications include ACSI (UK), QAFP (FP Canada) and AINS (The Institutes), as well as several investment licences from the Canadian Securities Institute. She also holds a master's degree in Business and Management from the University of Essex.

• For further inquiries or suggested topics, email justaskcarla@outlook.com