Tips that will help you make your very first investment
Making your very first investment can seem daunting. You may feel as though you have so much on the line and that your lack of experience is only setting you up for failure. This is not the case at all, and you would be surprised at how a little work can really go a long way.
Investing isn’t Just for Big Earners
You don’t need to have a flush bank account to start investing. In fact, there are plenty of investment funds out there that encourage you to invest smaller amounts. The one thing that you do have to remember is that investing can be a long game. You need to be prepared to lock away your money for 5-10 years, so if this is something that you are going to struggle with then take the time to plan out a new venture.
Don’t be Reckless
Gambling your money away on an unpredictable market can be nerve-wracking to say the least. If you want to get the best result out of your investment, then you need to take your time and do your research regarding the options that are available to you. By doing this, you can then be sure to make the best decision.
Sometimes there are tax advantages to investing. This is especially the case if you invest in stocks. You do not usually pay any capital gains on income that you earn through certain investments and you may only pay a flat rate percentage on your dividends too. If you want to get some additional help with your investment, then it is a good idea that you chat with a financial advisor.
What do you Want to Invest In?
Cash is seen as being the least volatile asset. Your money is protected, but with inflation, you could end up losing out. Fixed interest investments are usually loans to companies, and this can include corporate bonds. They provide reliable returns and they are much lower risk when compared to equities, so this is great if you are new to investing in general. Shares, or equities give you a stake in a company. Shares rise in value when a company does well, and they fall when the company start to decline. Of course, these aren’t your only investment options. In fact, you could invest in rare items or even in antiques too. If you want to do this then check out this guide on how to correctly value antiques.
Putting your Eggs in One Basket
If you funnel your cash into a single company and that company tanks, then you will lose absolutely everything. You need to make the effort to diversify as much as you can so that your entire lump sum spans across an entire portfolio. As some of the markets fall, others will rise, and they can then help you to support the losses.
Did you know that it is more than possible for you to buy shares directly? The problem with this is that it can be risky. If you want to avoid this then you need to try and invest in a collective fund instead. This will give you a super affordable way to buy a ton of assets without having the responsibility of managing them. If you are a beginner then a collective fund is probably the way to go. When you do this, a fund manager will use their knowledge and expertise to buy and sell things on your behalf. There is a charge for this but it’s not a lot when you look at the benefits you get.
Choose the Right Fund
There really are thousands of investment funds out there. You need to do your homework and you also need to choose one that meets the financial goals that you have. Monitor the overall performance of the fund over a period of time. When you do this, you can then find out how