Investing is one of the most important financial decisions you can make. It can grow your wealth over time and help you reach the future you envision for yourself, but it’s not without risk.

Making your first investment you’re new to investing, the process can feel overwhelming. There’s a lot to consider, including account types, taxes and investment choices. To ease your nerves and make the most of your investments, it’s essential to first understand why you’re investing. Every decision you make should align with your investing goals, timeline and tolerance for risk.

Before filling out your first trade ticket, determine why you’re investing and set short-term (three years or less) and long-term (more than three years) investment goals. For example, short-term goals may be saving for a big purchase or paying down debt; while retirement and education savings goals are best for longer term investments. Once you’ve set your goals, you can choose accounts and strategies that match. For example, savings that will be needed soon should be placed in high-yield savings accounts or certificates of deposit; while long-term investments should be invested in stocks or exchange-traded funds (ETFs).

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Once you’ve determined your goals and tolerance for risk, build a diversified portfolio of assets. This includes stocks, ETFs and mutual funds. Choosing the right mix will lower your risks by diversifying your exposure to market fluctuations. Beginners should consider starting with blue chip stocks, which are large, reputable companies that typically have stable performance and can hold their own in volatile markets.