With savings rates increasing across the UK, what better time to start your investment journey. For those comfortable with their savings and happy to look at spreading a little risk, perhaps now’s the time to look at alternative vehicles to potentially increase your wealth. Here are a few tips in our beginners guide to investing.
Is investing right for me?
Always do your research when it comes to investing. If you’re simply uncertain about taking the plunge financially or emotionally, then perhaps investing isn’t for you. Also, step back from investments if you have a lot of borrowing or expensive mortgage – sort out personal debt first.
Assess your risk
Discover whether you have the stomach for channelling your inner “Wolf of Wall Street” skills by trying an online risk quiz first, there are loads out there. A simple google search will help you to understand and assess how likely you are to deal with money losses in terms of your bank balance and your emotional side too.
Do your research
If you’re not sure what type of investment to pick or concerned you might take on too much risk, there are plenty of free websites packed full of detailed fund and stock market information. Money Saving Expert has great accessible online support for those wanting guidance about how to start.
Take a look at our investment blog covering the fundamentals of investments
We weigh up the risks and reward of some of the high street bank products and determine whether we can decide if they’re a sensible place for you to put your hard-earned money.
Beware of some “advice”
If the returns seem too good to be true, they probably are. Beware of social media, buy now, sell quick “opportunities” – they may not be what they seem. Furthermore, make sure you are taking advice from FCA regulated advisors who have tons of experience in managing investment portfolios.
Spread your risk
Whilst you’re an investment novice, it could be wise to spread your risks. Investing in low-risk investments will lead to lower returns (e.g. stocks and shares ISA) but maybe a good idea whilst you are testing things out. The higher the risk, the greater the volatility either way up or down. This is where you’ll stand to make the greatest profits or losses. However, whatever you choose, always take advice first. Think about what you are comfortable with losing and start low and slow, building up your confidence over time.
You’re in it for the long term
Investments generally increase in value over the long term but many fluctuate over the short term. Money Saving Expert recommends that you invest for at least 5 years and if you can’t, steer clear of investing and leave your money in a savings account.