Investing can be a good way to make your money work harder 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 are not wholly left at the mercy of the financial markets?
Here are a few tips:
Set goals
It is important that you have a clear goal in mind when you start so you have something specific to aim for. This will help you to invest effectively and in line with the appropriate level of risk. It will also help you to stay on track in the longer term.
Realistic expectations
It is important to try and stay patient and remain focused on the longer term goals when things are not going exactly to plan. Do not let emotions sway your decision-making and stay disciplined.
Diversification
It is important to invest in different asset classes. Having a good spread of equities (stocks), bonds, cash, and alternatives can reduce your vulnerability to economic fluctuations in a particular asset class. If you diversify your portfolio, it is more likely that you will benefit from growth in one asset class if another one is falling, therefore acting as a counter-balance.
Review your portfolio regularly
It is important to regularly review your investments to make sure that they are still in line with the level of risk that you want to take and they are on track to meet your objectives.
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 is a good way to keep hold of more of your money as you work towards your goals.
Get financial advice
It can be complicated to put together an investment plan that is realistic, diverse and capable of achieving your goals. An independent, professional, regulated adviser, like ourselves, will work with you, considering your specific circumstances and objectives, to help build a plan that works for you.
If you have any questions about devising an investment strategy, please do not hesitate to get in touch with us, and we will be happy to speak with you and help you achieve your goals.
