It has never been easier to take control of your future and invest your own money. The FCA and the government are forcing the investment industry to be more transparent and deliver better outcomes for investors. It means that there has never been a better time to start investing and saving towards your future goals, whether it be a home, your retirement or your children’s future. Yet there are some key things that all investors should consider if they want to increase the prospect of maximising their returns in the long term.
When you invest your money there is a myriad of charges taken from your investments. If you want the best chance of achieving your investment goals then you need your investment portfolio to grow as quickly as possible. By revinvesting that growth you benefit from the snowball effect of compounding. However, investment charges diminish the effect of compounding by taking a percentage fee out of your investments each year. To help you reduce costs I recommend reading my article The best stocks and shares investment ISA and the cheapest investment platform.
Choosing the right asset allocation
Building a diversified portfolio has been notoriously difficult for investors. In order to solve that problem, we spent a lot of time and money building our free investment asset allocation tool. The best investment asset allocation tool should be based upon as much quant research as possible and produce an asset allocation with a strong performance track record.
Buying the right investments?
Once you decide upon an asset allocation you then need to buy the underlying investments. While you could invest in individual assets such as company shares, by investing in funds (passive or active) you benefit from further diversification as each fund will hold shares, for example, in hundreds of companies in different sectors. If you want to find a proven way to choose investment funds themselves then I have produced a short series of emails to show you.