Investing can help you grow your money faster than simply saving, but it can also be a little daunting knowing where to begin. You may think the volatile global stock markets may not be the ideal starting point for new investors, but itâs always a good time to begin investing.
The power of compounding returns over decades is potentially enormous if you save consistently and invest in the financial markets. You can start small but get started.
If you are contemplating investing and looking to take your !first steps, weâve provided ten tips to get you started.
- HAVE A PLAN
To start off with, itâs important to have a plan for your investments. This means having an idea of what youâre trying to achieve and how youâre going to get there. Are you looking to invest for a specific goal?
Are you looking to achieve investment growth, income or both?
Ultimately without a plan, itâs easy to get off track and make decisions that arenât in line with your investment goals.
- START SMALL
You donât need a large sum to start investing. In fact, drip-feeding what you can afford each month â or gradually whittling away a lump sum â could be beneficial during times of stock market turmoil and economic uncertainty.
Your money buys more shares at a cheaper price when the market falls, and fewer shares at a higher price when the market rises. This averages out the price at which you buy investments and, over time, could help to smooth portfolio performance.
- USE YOUR TAX ALLOWANCES
Remember your Individual Savings Account (ISA) allowance, which renews annually on 6 April. This currently amounts to ÂŁ20,000 for the
2022/23 tax year. Investments inside an ISA grow tax-efficiently, which means more of your money goes towards achieving your future goals.
- BE PATIENT
Investing is a long-term process, thatâs why itâs important to be patient. Donât try to time the market or make decisions based on short-term fluctuations. Instead, focus on your overall investment goals and stick to your plan.
- DIVERSIFY
As the saying goes, âDonât put all your eggs in one basket.â When you diversify, you spread your risk across different investments and sectors, which can help you weather the ups and downs of investment markets.
- REVIEW YOUR PORTFOLIO
Your investment portfolio should be reviewed on a regular basis. This will help you make sure that your investments are still in line with your goals and that youâre not taking on too much risk with where your money is allocated.
- STAY DISCIPLINED
Investing can be emotional, which is why you need to stay disciplined. Donât let greed or fear influence your decisions. Instead, keep focused on your goals and stick to your plan.
- HAVE A TIME HORIZON
When youâre investing, itâs important to have a time horizon in mind. This is the amount of time you willing to wait for your investments to grow. For example, if youâre investing for retirement, youâll likely have a longer time horizon than someone whoâs investing to fund a childâs further education.
- BE PREPARED FOR BUMPS IN THE ROAD
Investing isnât always smooth sailing. There will be times, as weâve seen in recent years, when the market is down or your investments donât perform as well as youâd like. Itâs important to be prepared for these bumps in the road and have a plan for how youâll handle them.
- SEEK PROFESSIONAL ADVICE
If youâre not sure where to start or how to create a diversified portfolio, seek professional advice. Weâre here to provide you with the guidance you need to make smart investment decisions and take your first steps.
