Barclays expert on possible long term growth from investing
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For those looking to grow their money in the new year, investing may provide more lucrative returns than just leaving it in savings accounts for another year. With interest rates so low, it may be worthwhile considering other options to help build wealth and start some new financial habits from now.
Express.co.uk spoke with money experts at InvestEngine, who exclusively shared tips on how to start investing in 2022.
1. Set some goals
The first thing to do is set some goals. People need to have a specific aim for every single penny they earn, or else it can just be wasted, or not put to good use.
The expert said: “Do you have a specific aim in mind, like a deposit for a house or a retirement nest-egg? Or are you just looking to grow your savings as much as possible?
“Working out your investment goal is a good way to start your investing journey and to provide some discipline to stay the course — especially when stock markets get rocky.”
2. Don’t be a fashion victim
Additionally, Britons should avoid being impressed by investment novelty and fads.
They continued: “Investment crazes come and go, and by the time you’re on board the big gains may have already been made.
“Ask yourself whether you really believe that latest investment opportunity will continue to deliver, or could it be a bubble waiting to burst?”
3. Know your risk appetite
Britons should be aware that when investing, their capital is at risk.
Despite possible high returns, the market can also crash, and people could lose their money so it’s always valuable speaking with a financial advisor before putting money into anything they are unsure about.
InvestEngine urged Britons to know their risk appetite.
They said: “High-risk investments can crash just as quickly as they rise — could you stomach substantial losses over a very short period of time?
“If you would worry about big losses, and it could keep you from sleeping at night then choose low risk options.
“It’s important to invest at a risk level you feel comfortable with.”
Britons are urged not to put all their eggs in one basket.
“Spreading your bets” can help people reduce risk and smooth returns.They continued: “You’re not over-exposed if a single holding crashes, nor are you depending on just one share or investment coming good.
“Exchange-traded funds (ETFs) offer an easy way to diversify — many give you exposure to hundreds of different holdings for a very low fee.”
5. Keep it simple
Additionally, people should not focus on trying to pick winning shares or focusing on unusual assets as this often over complicates things.
“Broad stock market exposure offers the opportunity of good returns over time. ETFs allow you to track the performance of global or national stock markets (or, if you prefer, a bond market index or commodities like gold),” he explained.
6. Think long-term
7. Pick the right provider
They concluded: “It’s worth taking the time to find the investment platform that’s right for you. Costs have come down a lot in recent years, with the launch of commission-free dealing and growing interest in low-cost ETFs.
“Some platforms also help you build and manage your portfolio with handy features such as fractional investing, automated buying, and analysis of your holdings. Or, if DIY investing isn’t for you, look for a good-value managed service.”
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