With interest on savings accounts now lower than ever before, many savers are becoming increasingly frustrated that they are not being rewarded for their frugality. Investment may well be the answer. While many people may think that investing is for high rollers and Wall Street tycoons, the truth is that getting involved in the stock market may well be your ticket to seeing your money grow right before your very eyes.
People don’t need to have an enormous bank balance to invest, and it may be the case that you can start with as little as £50 per month. Remember that investing is all about long term gains, so be prepared to lock your money away for five or 10 years before you get involved. Try to keep as actively on top of things as you can.
Make sure you do thorough research before getting involved. There’s no point diving in head first into a world that you don’t fully understand. However, the savvy investor is much more likely to see a return on their investment than your average saver these days.
Research Different Investments
Cash has always been seen as the least volatile of investments, and is protected if a bank or building society ends up going under. However, inflation can gradually reduce your investment over time. Equity funding is another potential option which has become increasingly popular in recent years. Another option is to involve yourself in fixed interest investments where the returns are more modest, but they give an added sense of reliability. Then, there is getting involved in the stock market directly which is more of a risk if you’re a first timer.
Don’t Invest All Your Money In One Company
The risk becomes much greater if you have invested all your money in one company. If that business suddenly goes bust, your investment could be wiped out in one fell swoop. Your overall aim should be to have a diverse series of investments that cancel out any losses that you may incur.
Get Involved In A Collective Fund
If you are new to the stock market, it can be very difficult to know where to start and this also poses many more risks. A collective fund may be the way to go so you can buy up assets without having to make major decisions directly. A fund manager will then buy and sell your shares on your behalf, using their expertise to maximise your investment. Also, you are sharing the cost with other investors so it works out much cheaper than if you were to buy all the shares yourself.
Try investing a smaller amount on a regular basis rather than putting all your savings into your investment in one go. It’s impossible to pick the perfect time to defeat the market, but your odds of success are increased if you go for the little and often approach. This allows you to average out your overall cost and risk, and puts you in a much stronger position.
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