If you’ve got a healthy amount of savings and they’re not doing much for you just sitting in a bank account, you may well be thinking about investing. It’s the sensible thing to do and, if managed well, can make you a good deal of profit, or provide you with an extra source of income without depleting your capital. But with stocks, shares, ISAs, hedge funds, bonds and more to choose from, how can you know where to begin, or distinguish a bargain from a seriously dodgy deal? That’s where the experts come in, because it is very easy to make a bad investment decision if no professional advice is sought.
Set short and long-term priorities
The first thing you need to think about is what you want to achieve with your investments. There are two ways to invest: you can make a smaller amount of money over a short amount of time or you can choose long-term investments and make a larger amount when they eventually mature. Of course, these are two ends of a scale, with plenty in between, but setting clear priorities will help you to make the right choices. You should also be aware that investments that pay back more quickly generally carry more risk, especially if the returns are high. Successful investment is about finding the right balance, something that is different for each individual investor.
Watch the markets
How you set your priorities and what you choose to invest in should always be informed in part by the state of the markets. That means the specific sector in which you choose to invest, the state of the national economy and the state of the world economy. If you’re thinking of investing in a supermarket chain, for instance, you’ll need to think about how supermarkets in general are faring; what’s happening in the wider food retail sector, and what factors, nationally or internationally, might change people’s food buying decisions. Watching the markets for a while before putting money into them will help you get a feel for how they work, and you can even make fantasy investments and keep track of how they would have turned out.
Do your research
Once you’ve identified some individual companies or package deals that interest you, it’s time to start doing your research. That means tracking the way those companies have fared over time, looking up details of their directors and tracking how other companies that those directors have been involved in have fared. The best predictor of future performance is past performance. Check trade journals to find out what other people are saying about them and remember that as a company becomes better known – a more predictable bet – its stock price is likely to rise.
Spread your assets
The trick to investing successfully is not to put all your eggs in one basket. Spreading your assets – that is, putting your money into several different things – gives you some protection if unexpected problems occur. For best results, you should invest in more than one sector, and you could even consider investing in more than one country, reducing your risk of being impacted by a market collapse. It’s also a good idea to balance your portfolio by putting some of your money into short-term, higher-risk assets and some into slow-ripening, lower-risk ones.
How an investment advisor can help
Even when you know what you’re doing, the amount of research involved in all this can be very time consuming. It makes more sense to bring in professional advisors to help make sure that your money is well placed. Shard Capital Partners LLP look after investments all the time so have a great deal of expertise and a sound understanding of the state of the markets to bring to its investment decisions. Although there is obviously a fee to pay for this type of service, expert help can increase the profits from your investments to the point where it quickly starts paying for itself. It also means that – provided you’ve chosen a company with a good reputation – you’re far less likely to fall prey to fraud.
Bringing in an advisor doesn’t mean that you can’t still have fun tracking your investments and celebrate when you have a big success – you just won’t have to do as much hard work. You’ll also have great opportunities to learn about how it’s done. Investing can be a fascinating process to be involved with, and with the right professional support it can also be a lucrative one.