Use these tips and key steps to help find a Money investment that’s right for you.
Review your needs and goals: It’s well worth taking the time to think about what you really want from your investments. Knowing yourself, your needs and goals and your appetite for risk is a good start, so start by filling in a Money fact find.
Consider how long you can invest: Think about how soon you need to get your money back. Time frames vary for different goals and will affect the type of risks you can take on. For example:
• If you’re saving for a house deposit and hoping to buy in a couple of years, investments such as shares or funds will not be suitable because their value goes up or down. Stick to cash savings accounts like Cash ISAs.
• If you’re saving for your pension in 25 years’ time, you can ignore short-term falls in the value of your investments and focus on the long term. Over the long term, investments other than cash savings accounts tend to give you a better chance of beating inflation and reaching your pension goal.
Make an investment plan: Once you’re clear on your needs and goals – and have assessed how much risk you can take – draw up an investment plan. This will help you identify the types of product that could be suitable for you. A good rule of thumb is to start with low risk investments such as Cash ISAs. Then, add medium-risk investments like unit trusts if you’re happy to accept higher volatility. Only consider higher risk investments once you’ve built up low and medium-risk investments. Even then, only do so if you are willing to accept the risk of losing the money you put into them.
