Interested in investing but have a shoestring budget to work with?
You can begin investing even if you have a small nest egg to start off with. Not everyone can manage to begin investing with large sums of money. Rising living expenses, escalating rents and property costs can make it difficult- if not impossible- to save a big sum of money for investing.
However, the good news is that building an investment portfolio is no longer the prerogative of the rich and privileged. The intense competition among investment firms and the advent of the internet have all helped reduce the costs of investing and it is now possible to start your portfolio with a nominal sum.
Here are some tips to build a low-cost investment portfolio:
Opt to Invest in Low Cost Stocks
The best way to begin building your own low cost portfolio is to research low cost stocks. You might want to invest in low cost stocks that have the potential to do well in the long run. In order to identity low-cost but safe stocks, it’s advisable to do some serious, intense research. Many online investors offer free access to the latest updated financial articles and news.
Consider using Fund Supermarkets
Fund supermarkets are excellent online resources that allow you to buy and sell stocks by proving an user-friendly interface. The biggest advantage of fund supermarkets is the low cost of operation. Most reputed platforms offer free accounts and others charge a minimal annual fee. Fund expenses come to less than 0.25% of your investment cost.
Seek low-cost Financial Advice Services
Most of us may be new to the world of stocks, bonds and funds. Try and negotiate the price with a good financial adviser. If you show the inclination to forge a long-term relationship, most financial advisors will be willing to offer better rates. Many reliable online investment websites offer their own dedicated advice service at nominal costs.
Investing attracts hidden costs like the Annual Management Charge (AMC) and TER (Total Expense Ratio) will be deducted from your earnings. The True and Fair Campaign (a consumer based UK organisation) has been lobbying for the inclusion of all fees and charges under one umbrella.
If you want to make the most out of your pound, it’s best to opt for diversified investments to avoid putting all your eggs in one basket. Reducing transaction fees help in cutting down investment costs.
What tips would you add for low-cost investing?