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To have the best likelihood of growing your assets it is advisable to invest for the long term. This helps your investments ride out periods when the stock market goes down as well as up.
It also means you should only invest money you can reasonably afford to put aside and don’t need for everyday living.
Common investment mistakes
Succumbing to the emotions of fear and greed
The value of stocks and shares can go up and down and often the natural human reaction to falling prices is to be fearful of further falls and sell. This means you might not be invested when and if the market recovers and could result in buying back in at the top. To counter this, it’s worth planning to stay invested for the long term.
Putting all your eggs in one basket
Diversification is crucial and is the basis of portfolio management theory. Buying a mixture of asset classes can give you exposure to different aspects of the market as it’s difficult to predict which area will perform best in any given period.
Not using your tax-free allowances
Each of us gets an annual tax-free allowance to invest, via an Individual Savings Account or ISA. Not making use of this can erode your capital so it’s important to understand what is available to you.
Common misconceptions
You need a lot of money to invest in the stock market
At JM Finn, we offer a personalised service to all clients with investment levels starting at £20,000. This would give you access to an individual investment manager who would look to build a relationship with you over time and understand your investment requirements and, importantly ensure you have someone to talk to as and when your circumstances change.
To have someone do it on my behalf is prohibitively expensive
Investing in a multi-asset portfolio where the assets are pooled with those of other investors can be a cost-efficient method of putting your money to work in the stock market.
I’d rather invest myself than pay someone else to do it
Doing it yourself could be a cheaper option. However, we see investing as a full-time occupation, with all aspects of a portfolio needing to be reviewed on a regular basis, so successful investing is often restricted to professionals rather than time-poor investors working hard on their careers.
Investing is complicated
It can be. That is why we believe that having someone at the end of the phone who knows you and your investment requirements is key to simplifying the whole experience.
To find out how JM Finn could help you get started with investing, please contact marketing@jmfinn.com
The value of securities and their income can fall as well as rise. Past performance should not be seen as an indication of future results. All views expressed are those of the author and should not be considered a recommendation or solicitation to buy or sell any products or securities.
