Investment trends are constantly changing and evolving – moving with the tides of a shifting global economy, political events and social upheaval.
Today the world of investment is more changeable and unpredictable than ever, which makes it increasingly hard for people to feel confident parting with their money.
Yet it is still possible to make successful investments, you just need to make sure you are following all the right rules.
1) Never invest more than you are prepared to lose
This is one of the most important things to consider when investing, and it means you need to be fully aware of your financial circumstances in order to make the right decision. Pay close attention to your chosen vehicle for investment, your levels of disposable income and any potential returns to avoid falling into a pattern of debt and loss.
2) Build a contingency fund
Your back up when investing should be a contingency fund which is an important part of risk management. This capital can be used to make up for any losses, balance your trading account and provide security should a sudden economic downturn occur.
3) Develop a diverse investment portfolio
The saying “Don’t put all your eggs in one basket” applies to investments. As your financial returns start to grow, consider other means of investment that are different to your current market sectors. This may double your responsibilities, but it will help to minimise the risk of losses from an economic downturn or sudden shift in the market.
4) Take advantage of tax-free growth
There are several investment options that are free from capital gains tax, including tax-free stocks and shares and bank accounts such as cash Isas. Find out more by visiting our blog on Super Isas.