New to investing? Here’s everything you need to know

May 15, 2023

Investing can seem daunting and complex, especially for those who are new to the world of finance. However, with the correct knowledge and guidance, anyone can become a successful investor.

In this blog post, we cover the basics of investing so you can safely embark on your journey.


Understand your goals

Before you dive into the world of investing, it’s crucial to identify your financial goals. Do you want to save for retirement? Are you looking to buy a house or fund your children’s education?

By answering these questions and understanding your goals, you can begin shaping your investment strategy and determine when you want to see returns from your investments.


Educate yourself

Investing requires a solid foundation of knowledge of what it involves and the risks associated — if you want to be successful, at least.

Therefore, you need to take the time to learn about different investment options, such as stocks, bonds, mutual funds and real estate. You also need to understand the potential risks and returns associated with each investment type.

There are plenty of resources online about each investment type; we won’t go into detail on any here because, if you’re serious about investment, you’ll find and read eBooks dedicated to each individual type of investment! However, we’re always on hand for a chat about investment classes.


Create a budget and emergency fund

When you’re investing, it’s essential to ensure that you can cover your day-to-day expenses with room to breathe in case something unexpected crops up — a car breakdown, emergency dentist visit, that sort of thing. After all, your investments shouldn’t  compromise your living standards.

Additionally, you should set up an emergency fund that can cover unforeseen expenses. That way, if surprise costs really start to mount up, you can cover them without having to prematurely dip into your investment portfolio.


Determine your risk tolerance

Investing always involves a level of risk, so it’s important to decide how much you’re willing to accept. Your age, financial situation and comfort levels with fluctuations in the market may all have an influence.

It’s because of risk that you should always seek financial advice, especially if you’re investing a high amount of funds.


Start with a diversified portfolio

Another way to mitigate risk is to diversify your portfolio by spreading your investments across different asset classes and industries. If one of your investments performs poorly, the losses should be offset by another, healthy investment.


Choose the right investment account

While you can invest in certain assets directly through one of the many investment platforms on the market, another tactic is to open an investment account.

You could, for instance, open a cash or stocks and shares ISA. Alternatively, you could open a self-invested personal pension.

Each account has its unique features and tax implications, so make sure you research account types and select the one that best suits your investment needs.


Think long-term

Investing is not a get-rich-quick-scheme: it requires patience and a long-term mindset. So, stay focused on your goals and avoid making impulsive decisions based on short-term market fluctuations.


Regularly and rebalance your portfolio

Once you have established your investment portfolio, it’s important to monitor its performance periodically, rebalancing it as needed to protect your investments.

Remember, though: investing is a marathon, not a sprint, so refrain from knee jerk adjustments because of a single day of subpar performance.


Seek professional advice

If you’re unsure about making investment decisions or need assistance with complex investment strategies, don’t hesitate to seek advice from a financial adviser. A professional can provide personalised guidance based on your financial situation and goals.

Investing may seem daunting, but we’re on hand to help. Get in touch with us today to start your investment journey.

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