Invest as much of your annual ISA allowance as you like in either a Stocks & Shares ISA or a Cash ISA, or any mixture of the two
Some people never look beyond Cash Individual Savings Accounts (ISAs), but by using Stocks & Shares ISAs too, you could get a higher return on your investment. Stocks & Shares ISAs can contain shares, bonds and investment funds. There are no restrictions about where in the world you can invest: it does not have to be all in the UK.
Choosing a broad spread of instruments in which to invest
If you require your money to provide the potential for capital growth or income, or a combination of both, and provided you are willing to accept an element of risk, pooled investments allow you to invest in a large, professionally managed portfolio of assets with many other investors. As a result of this, the risk is reduced due to the wider spread of investments in the portfolio.
Every investor is unique, but everyone faces the same trade-off between risk and reward
The best place to start when you are looking to build a diverse investment portfolio is to ask yourself why you’re building a portfolio. For most of us, the central task is to build a pot of money that involves you, the investor, taking some risk over the long term, at the end of which you will have ideally built up a sizeable portfolio of diversified assets that will last you through to your retirement years.
Minimising exposure to volatility and market setbacks
Investing would be easy if markets rose in a straight line. Unfortunately, that is rarely the case. Over the long term, assets such as shares and bonds have tended to produce positive returns, but there have been several bumps along the way. In any event, past performance of investments cannot be taken as a guide to their future performance.
Managing the risks you are exposed to in order to avoid suffering losses to your capital
Whether you’re planning to start investing your money, or even if you’re already a seasoned investor, it’s crucial to make sure you manage the risks you are exposed to in order to avoid suffering losses to your capital. The key is to build a diverse portfolio with a mix of different investments that makes sense for your attitude to risk.
On 6 April this year, ‘pensions freedom day’, the pension landscape changed forever. From this date for the first time ever, individuals were given complete control over all the money in their ‘defined contribution’ retirement savings plans, whether large or small.
The new pensions freedom rules giving far greater flexibility over what you can do with your pension pot came into force on 6 April 2015.
According to new research conducted by YouGov and Old Mutual Wealth, nearly half (48%) of those approaching retirement (aged 55-64) do not know how long their pension income will last. With pension providers reporting demand for flexible withdrawals, there is a significant danger that pension funds could run dry if people do not plan carefully or take professional financial advice.
The fundamental environment in emerging markets remains stable. As the market has grown accustomed to living with several pending risk events, liquidity and risk appetite have been creeping back up. Buyers of emerging market mutual funds have been returning to the asset class after the commencement of the ECB’s version of QE.
UK adults have an average eight-year blind spot when it comes to financial planning – and can only see themselves in the future as far ahead as 2023, new research from long-term savings and investment specialist Standard Life reveals.
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