Investing is a good way to make your money work hard for you, so you can build wealth faster than you could if you put it in a savings account.
But the value of your investments can go down as well as up and can expose you to a greater level of risk than leaving your money in the bank.
So how can you make the most of your investments and make sure your finances aren’t wholly left at the mercy of the financial markets?
Here are a few tips.
It’s really important that you have a specific goal to aim for, so your investment plan can be devised with that firmly in mind. That helps you stay on course and make decisions that support what you want to achieve.
Don’t expect instant results
You need to be patient and disciplined, so if the market is underperforming, you should hold your nerve and remember your long-term goals. Don’t let emotions such as fear and panic guide your decision making or knock you off course.
Don’t put all your eggs in one basket
If you invest in a single industry, location or asset type, your investment plan could be jeopardised if it takes a hit. So it’s important to have a good spread of cash, property, bonds and shares, as this can reduce your vulnerability to economic fluctuations in a particular market. If you diversify your portfolio, it’s more likely that you’ll benefit from growth in one area if another aspect is falling.
Review your portfolio regularly
Investment markets can be volatile, so it’s worth taking a fresh look at your portfolio to make sure you’re not exposed to an excessive amount of risk. At the same time, you can check if your investments still reflect your goals, which may have changed over time.
Don’t forget your tax allowances
You can invest or save up to £20,000 without paying any tax if you have a cash ISA or a stocks and shares ISA. It’s a good way to keep hold of more of your money as you work towards your goals with investment returns received from an ISA being tax free. There is also no personal tax on any income taken and no capital gains tax on any gains made.
Get financial advice
Putting together an investment plan that is realistic, diverse and capable of helping you achieve your goals is complicated. So it’s well worth speaking to a professional, regulated financial adviser before you get started.
They’ll work alongside you, considering your specific needs, circumstances and objectives, to help you build a plan that works for you.
If you have any questions about devising an investment strategy, please don’t hesitate to get in touch with us, and we’ll be happy to speak with you and help you achieve your goals.
The value of your investment is not guaranteed.