1. Review your needs and goals
It’s well worth taking the time to think about what you really want from your investments. Knowing yourself, your needs and goals and your appetite for risk is a good start, so start by filling in a Money fact mind.
2. Consider How long you can invest
Think about how soon you need to get your money back. Time frames vary for different goals and will affect the type of risks you can take on.
3. Make an Investment Plan
A good rule of thumb is to start with low risk investments such as Cash ISAs. Then, add medium-risk investments like unit trusts if you’re happy to accept higher volatility. Only consider higher risk investments once you’ve built up low and medium-risk investments. Even then, only do so if you are willing to accept the risk of losing the money you put into them.
4. Check the charges
If you buy investments, like individual shares, direct, you will need to use a stockbroking service and pay dealing charges.
If you decide on investment funds, there are charges, for example to pay the fund manager.
And, if you get financial advice, you will pay the adviser for this.
Whether you’re looking at stockbrokers, investment funds or advisers, the charges vary from one firm to another.
Ask any firm to explain all their charges so you know what you will pay, before committing your money.
5. Investments to Avoid
Avoid high risk products unless you fully understand their specific risks and are happy to take them on. Only consider higher risk products once you’ve built up money in low and medium-risk investments. And some investments are Usually best avoided altogether.
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