Despite some turbulent times in the markets this past year with Covid-19 complicating matters further, there are signs that the markets are partially recovering, however caution is needed as volatility remains.
So, you want to invest?
When it comes to investing, I often hear phrases such as 'daunting', 'risky', 'for other people' or 'maybe one day'. But the good news is that learning more about investing does not have to feel confusing and the main take away point here, is you are not on your own.
Word of caution
There is no such thing as a free lunch and nor is there a totally risk free investment. If you want risk-free investment with a guaranteed return the answer is simple – don't invest!
There are different degrees of risk, and some can be offset and mitigated by various strategies such as diversification otherwise known as not putting your eggs in one basket. Always seek Independent Financial Advice about your personal attitude to risk and your specific circumstances to ensure any investment strategy is tailored to your requirements in the most suitable way.
It's imperative that you are aware that any form of investment can go down as well as up in value and you may not get back the amount you put in. There is no reason to be concerned about this on your own but the biggest lesson is do not try and DIY your investments without educating yourself first as things can go wrong and very quickly. There is plenty of literature on 'investing for beginners' and 'how to beat/time/own the markets' but please do not fall for it – you need expert advice by an IFA who is authorised and regulated by the FCA, this will not only afford you a protection should things go wrong, but it will also afford you the access to the knowledge, tools and expertise of a fully qualified, professional adviser. After all, you would hardly attempt to perform a root canal surgery on yourself, so why would you ever do this with your money???
If you are in a position of having readily available 'spare' pot of money you should make sure that it works hard for you and gives you the opportunity for potential growth. If it just sits in a low [or worse, zero] interest rate bank account not only it does not grow in real terms, it is actually losing value due to inflation. In practical terms whilst your money is 'safe' your purchasing power diminishes if inflation goes up.
There are investments which are designed to be capable of keeping up with inflation with the caveat that it will come with a risk to your capital – again, please speak to your adviser about the most suitable investments for you.
Investing is by and large a long game, the more time and patience you have the potential for return is proportionate to the duration of the investment. There are many types of investments with many variables and many risks. Whether you are a complete novice, or a veteran of investing please feel free to talk to us and see how we can help.
Silvia Johnson Bsc(Hons), DipPFS, EFA, CertCII (MP) is a Director and Independent Financial Adviser at Royale Thames Wealth and provides independent financial advice to individuals and businesses.
07908 109 741 / 020 8720 7249
Royale Thames Wealth Ltd is an Appointed Representative of New Leaf Distribution Ltd which is authorised and regulated by Financial Conduct Authority number 460421.The value of your investment may go up as well as down and the value is not guaranteed. Past performance is not a guarantee of future performance.Wills and Estate Planning are not regulated by the FCA