If you are new to investing it can seem like a daunting prospect, you are essentially parting with your hard-earned money with typically no real guarantee of a safe return. This can only then be made worse when you have to get to grips with new terminology and often financial jargon that is used by well-versed investors. To help give you peace of mind and to take some of the apprehension out of those first few investments, here are some investment tips designed to help fledgling investors.
Set up an investment budget
Investment is not just for bankers and stock market pros and neither is investment achieved in the stock market alone. There are many ways to invest and it can be done with any budget. Ultimately you can invest as much or as little as you want and better yet, you can still build yourself a decent return even when your initial investment is a modest amount. Set yourself a budget, this could be a one-off finite budget that you want to invest or an ongoing monthly allowance to help grow your investment portfolio. Just be sure you are comfortable with the amount you decide upon and that you are not over-reaching yourself.
Consider what you want to invest in
It will not take you a long time to figure out that there are many ways in which you can invest your money and build your investment portfolio. Therefore, it is important to understand what you want to invest in from the outset. If you are risk-averse then you may want to look at so called safer investments such as government-backed bonds. Although you shouldn’t expect to see huge variations in the return potential. Alternatively, you may be comfortable with a higher risk investment with the possibility of a greater return. Typically the stock market can provide investors with a high yield but it certainly is not without its risks. You need to decide on an avenue you are comfortable placing your money in. Also, be sure to do your research thoroughly and don’t follow the crowd, just because your friend has invested heavily in Volvo Penta and the Volvo Group does not mean you should too. It may well transpire to be a savvy move but you need to understand the reasons for the investment and be satisfied that it is right for you.
Diversify
You will hear investors talking about diversification and with good reason. Regardless of your approach to investments, even if you are a low risk investor you should always seek to diversify your portfolio. This will help limit any potential losses as you will not have all of your assets tied into one investment. For example, if you were highly invested in airlines or holiday companies before the pandemic you would have seen a huge drop in your investment portfolio. If this investment has been diversified into other shares or investment streams your assets may have been better protected.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)