The financial world is often perceived as being a high-stakes game in which people take big risks in pursuit of big rewards. It’s true that nothing in it should be taken for granted, but there’s another side to it – carefully structured, long-term investment can actually reduce the risks you face in life. It can enable you to set up a fund for the future that could help you in retirement, let you enjoy travelling or support your family after you’re gone. If you’ve got savings that are barely keeping up with inflation in the bank, how could you invest them with this goal in mind?
Investments to consider
When you want to keep risk at a low level and you have time to let your investments grow naturally, some options immediately present themselves as advantageous. ISAs are attractive because of their simplicity and the tax advantages they offer. Property, if well chosen, is guaranteed to retain value even in the most difficult economic climates and if you can’t sell it for as large a profit as you might like, there is always the option of renting it out. Bonds are as secure as the country itself. You can also consider items like antiques and art, but be wary of buying gold from high profile dealers, who tend to charge inflated amounts, and don’t rely on the artificially maintained price of diamonds – emeralds are far more stable. If you’re interested in the stock market, look for strong young companies with plenty of room to grow.
Balancing your portfolio
As a rule, assets that take a long time to ripen – to get to the point where they’re providing you with a good income or are ready to sell – are comparatively low risk. There are greater risks attached to assets that ripen quickly. Most professional investment advisors, however, advise that you balance your investment portfolio by selecting some more immediately profitable assets alongside your longer term ones. The risks involved will be balanced out by your long-term choices and if you’re fortunate and they produce good short-term yields for you, you can use that money to grow your portfolio overall, adding to your slow-ripening assets.
How to invest
With some investment types, the sign-up process is fairly straightforward. when it comes things like stocks and commodities, however, you’ll really need a broker to help you explore what’s available and identify promising deals. You can compare online broker fees at Learn CFDs, which is also a good place to read broker reviews and work out which company will be best suited to your needs. Don’t trust brokers who have no reviews on major sites, and make sure anyone you deal with is properly regulated – there are scammers out there!
Even with a good broker, if you really want to be successful with your investments, you should take the time to do your own research before investing. The better you understand what you’re putting your money into, the better you’ll do – and then you’ll have a much larger fund available when it’s time to spend some money on yourself.