There are so many different ways to invest your money and, best of all, they are constantly evolving. Regardless of how much you invest and which platform you decide to use, the trick to a successful return on your investment is down to research, planning ahead and knowing how to play the game. In this article, we run through a few tips to get you started.
1. It’s not just about the big bucks
Investing can be done for very little money, to begin with, from penny shares to a whole raft of new apps that can help you to invest small amounts and get a feel for how things play out. Most investments are a long term gig and starting small allows you to learn to cope with the rollercoaster of watching your funds inevitably rise and fall.
2. Don’t be impulsive
Investing is just gambling by another name, but actually, so is saving your cash in a bank. History shows us that over the longer term, investing in equities will outperform your bank savings account, but you must temper that with a cautious approach to risky or unpredictable markets.
3. Investing is better for tax purposes
Did you know that you do not have to pay capital gains tax on income that you acquire from ISA investments? Your annual tax-free allowance on a stocks and shares ISA is £20,000 and you only pay a flat 10% on any dividends too.
4. Plan your investment targets
Although saving your cash in a bank is generally a pretty safe option as your money is always protected should the bank or building society go under, there are far better investment opportunities to be had with government bonds, shares and equities. You could also look at investing in property funds or commodities such as gold, oil or steel.
5. Make sure you keep a diverse portfolio
Putting all your eggs in one basket is never a good idea and this is especially true of investing. The more you can spread your investments across multiple funds, asset classes and global markets, the more likely you are to survive the inevitable rise and fall of different markets or at least the rises have more of a chance of cancelling out the losses. If in doubt, consider taking advice from an asset management solutions specialist to help direct your investing adventures.
6. A fund can be great for beginners
Instead of investing directly, you could look at investing via a fund; this is a more affordable way of exploring multiple shares across a variety of classes as part of a financial collective. Their experience is quite likely to be superior to yours and it can be a far cheaper way of investing than going it alone.
7. Do your homework
There are simply so many different investment funds, each with their own criteria and levels of risk so it’s important that you put the requisite research in when it comes to deciding which way to go. Don’t rely on a single year’s data either, get historic and see how it performed 5 or 10 years previously, this is a long term game and you need all the data you can get to make smart decisions.
