Top Tips for Successful Investing

Financial investment is a big decision, and one that should only be made once you know and understand all the facts and possible risks. So what are some top tips for successful investing?

Before you invest any money, you should first evaluate whether you’re in a financial position to do so. For instance, do you have surplus funds to invest, or would investing put your emergency funds at risk? It’s always worth remembering that emergencies do occur - so you’ll want to ensure your investment moves don’t jeopardise any money you’ve put aside specifically for this purpose.

Once you’ve established that you’re in a financial position to invest, think about what level of risk you’re comfortable with. Perhaps you have a more cautious attitude towards risk; or, maybe the availability of your funds will determine your level of risk for you. Either way, determining your level of risk is a big part of investing. Remember that you can also limit your exposure to risk by spreading your money across different types of investments, rather than placing a larger sum on a single investment.

On a similar note, you’ll want to decide what kind of return you want from your investment. This entails determining how long you want to invest for and what you want from your investment - whether it’s growth, or the ability to withdraw funds from your returns.

Next, you’ll want to consider your investment options and thoroughly research each of them. For instance, if you want to invest in a particular fund, it’ a good idea to check the financial press and various financial websites for information and news regarding the company behind the fund. However, it’s also important to remember that a company’s past performance is not a good indicator of future performance - so, simply because a company has done well in the past, doesn’t mean it will do well in the future.

Once you’re confident that you want to invest in a specific fund, there are a few more points to consider. First, you’ll want to familiarise yourself with the style of your chosen fund. Some funds are actively managed, where fund managers make decisions about the investment; while other funds are passively managed - where the fund is organised to match the performance of a specific share index. Make sure you’re comfortable with the style of the fund before you commit to the investment. Next, be aware that all funds attract charges and unique tax terms - so you’ll want to make sure you’re getting value for money after charges are made, and that you’re investing on a tax-efficient basis. If you’re investing with an adviser, find out in advance how much you’ll be charged for advice.

Once you’ve actually invested money, it’s important that you keep an eye on your investment. Whether it’s through the financial press or any of the numerous financial websites, knowing how your investment is doing can help you make appropriate decisions regarding your investment in the future. Be aware, however, that the value of your investment may go down as well as up. The fund value which is available to provide benefits to you at retirement may be less than the full amount of the payments you have made. The rate of growth of funds cannot be guaranteed and past performance is not a reliable indicator of future performance.

Last but not least, seek financial advice from a qualified investment professional before and throughout your venture - particularly if you’ve never invested before. An advisor can inform you on what the whole process entails, as well as offering advice on how to invest your money, and can even help you determine if it is right for your circumstance.

This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.