Nowadays more and more people want to start putting away a part of their money to try to ensure a more stable economic future. While saving simply means to put money aside, investing gives people the chance to see their money grow over time. A cautiously planned investment has in fact the potential to produce a significant financial return, and that's why so many people decide to start investing their money. However, it is really important to always keep in mind that any kind of investment comes with a risk. When investing, you'll be giving your savings the chance to grow but you might also end up getting less than what you deposited. That's why you should always set a good financial plan which could allow you to invest to maximise your returns. This way you'll be able to minimize any risk and to make smarter choices. The first step to make a solid financial plan is to create an investment portfolio. Keep reading to find out what it is.
What is an investment portfolio
As previously mentioned, the smartest way to get the most out of your new investment journey and to minimize any risk is to cautiously create an investment strategy. This will be possible thanks to the investment portfolio, which consists in a collection of shares, stocks, bonds and other financial assets. When creating an economic plan, diversification is crucial because it allows you to reduce any risk at the minimum by investing in many different areas. Moreover, when you're planning your future investments, you'll be identifying and setting your economic goals in order to turn them into a solid financial plan.
Things you should keep in mind before you start to invest
If you decided to start investing your savings, there are some important things to keep in mind in order to get the most out of your experience. For instance, you should never forget that all investments could potentially go wrong and you could also see your money go down. Also, it is crucial to always remember that the higher is the potential return, the higher will be the risk of losses. That's why creating a solid financial plan is so important: by owning a collection of assets in many different areas you'll be able to lessen the impact of one negative investment. New investors also have the chance to seek for financial advice from a counselor, which could be very useful to create a good investment portfolio and to invest in the right areas.
Where to invest
Nowadays there are many different products in which UK residents could invest such as GIA, ISAs SIPP and so on.
For example, GIA (General Investment Account) is a very popular investment account, which consists in an investment fund intended to give the holder the opportunity to invest his savings in many different fields, always outside of tax wrappers. Nowadays GIAs are available for all people who live in the United Kingdom over the age of 18. New investors tend to choose to open a GIA because it gives them the chance to invest money in a really diversified range of shares, bonds, funds, EFTs, estates and so much more. When you put money on a GIA you don't have any particular benefit regarding tax and you'll have to pay contribution depending on your financial situation. Unlike a retirement fund, a GIA is an investment account that lets you withdraw your savings at any time. As a matter of fact, some people prefer a GIA over retirement funds because it allows the holder to access his fund even if he hasn't reached the retirement age yet, which in the UK is currently set at 55 years old.
Anyway, as already mentioned you should always keep in mind that any kind of investment involves risks and the money invested could grow as well as go down because of the market volatility.
