Our guide about how to start investing

When you start to plan for a future, you soon realise that investing is vital in achieving your future financial goals. Here’s some background information for you if you are thinking about investing and we can work out together if this is right for you and your circumstances.

What is investing?

Investing is when you set aside some money for the future and when you invest you believe it will increase in value over time. When you make an investment, it has the potential to generate a better return than a savings account would. However, this won’t be a quick turnaround, you should be willing to set aside your money for at least five years to give it the best chance to grow. There is obviously a risk with investment and that is the value can increase and decrease so there is also a chance that you could get back less than you put in.

You can invest in all types of investments, the more common ones include gold, property or shares but others could include art or wine. We aim to ensure that you invest proactively, positively and with integrity. Alongside financial returns customers also have the ability to generate a measurable beneficial social or environmental impact.

For today, we are going to focus on two common ways to invest: funds and shares.

What are funds?

When you invest in funds, you are buying into a mix of assets, which can include shares, property, government bonds and cash. The great thing about funds is that you are not putting all your investment ‘eggs’ into one basket. Instead, your money is put into a range of investments which can help spread the risk.

Funds can vary in risk from ‘cautious’ funds at the lower-risk end of the scale to ‘adventurous’ at the higher-end. Which investment fund you choose can vary depending on your age. For instance, if you are young, you may want to consider a more adventurous fund, whereas if you are close to retirement, you may want a more cautious fund as you have less time to recover from any dips.

What are shares?

When you buy shares, you are effectively buying a small stake in a company. Companies sell shares to raise money, which can then be used to expand their business. Investors, otherwise known as shareholders, are able to buy and sell some or all of those shares on the stock market at any time. Share prices can go up and down, based on the company’s performance and this will be reflected in the share price.

Because your investment increases and decreases with the share price, your money has the potential to grow and fall in value.

Is investing for you and your circumstances?

You will need to consider your current financial position, what your financial goals are, and how you feel about risk.

To summarise:

  • Investing is for the long term
  • The higher the potential rewards, the higher the risk of losses.
  • Many people start with investing in funds.

We would recommend starting to invest as early as you can so your money will have more time to grow.

Our website offers more in-depth information about investments and if you would like to discuss this topic in more detail then please get in touch.

*Please note: Your capital is at risk. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. However, if you decide to sell your investments in a General Investment Account you may be liable for Capital Gains Tax.

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