Influence how your investments are managed in future
You need to consider what you really want from your investments. Knowing yourself, your needs and financial and lifestyle goals, and your appetite for risk is a good start. Bumpy rides in the stock market are nothing new, but they can be hard for investors to deal with.
Spreading risk between different kinds of investments
A successful personal lifestyle financial plan has no value unless it is properly implemented through an appropriate investment strategy. If you’ve got a sufficient amount of money in your cash savings account – enough to cover you for at least six months – and you want to see your money grow over the long term, then you should consider investing some of it.
How to avoid trying to second-guess market movements
Fear and worry is understandable, particularly as the coronavirus (COVID-19) outbreak led to the biggest daily drop in the FTSE 100 since the financial crisis. Trying to second-guess the impact of events such as the coronavirus or the recent global stock market volatility – or even attempting to make a bet on them – rarely pays off and understandably can deter some people from investing.
Investment goals and timescales influence how much risk you’re willing to take
The words ‘saving’ and ‘investing’ are often thrown around interchangeably – however, they play very different roles when it comes to your financial goals. Thats why if you want to plan for your financial future, it helps to understand risk associated with both.
Understanding of how various asset classes work together,
When you start investing, or even if you are a sophisticated investor, one of the most important tools available is diversification. Whether the market is bullish or bearish, maintaining a diversified portfolio is essential to any long-term investment strategy.
The post-war years are often thought of as a time of economic stability, but the high inflation in the 1970s saw significant losses for savings and investors. Since this period, generations have become accustomed to low inflation. But what could rising prices mean for people with investments?
Investing in different things, with different strategies
Pooled investment funds – also known as ‘collective investment schemes’ – are a way of combining sums of money from many people into a large fund spread across many investments and managed by a professional fund manager.
When you’re starting out working in your 20s, you may not be thinking about retirement in 40 years. The same goes for your 30s, 40s and even 50s. There is always something on the horizon you could be saving for besides your retirement.
Start planning your legacy to mitigate or reduce Inheritance Tax
If you’ve worked hard throughout your lifetime to grow your wealth, and hope it will help to safeguard the financial security of your loved ones after you’ve gone. But without careful planning in your lifetime, you could leave them with less than expected after the Inheritance Tax bill is paid.
