Tips for choosing investments.


  1. Think about what you are investing for and the timescale.
  2. Plan and write it down
  3. Don’t put all your eggs in one basket.
  4. Will you possibly need to interrupt your plan?
  5. What charges will there be?
  6. What is a reasonable return on this/these investments?
  7. Review.
  1. Saving for a holiday in 6 months should differ from further education or retirement needs. In the first example you probably don’t need sophisticated investments that tend to fare better over longer time scales. The second example might be short, medium or long term depending on the ages of the child/children. Possibly a mixture of strategies over a range of times spans might be more suitable, and retirement planning is usually long term unless you have really left it late in life!
  2. The advantage of having a plan is to conceptualise the reasons, advantages and what you might have to forfeit to achieve your plans. Writing it down imposes some degree of commitment – a bit like a sport related training plan.
  3. Diversification is the key to smoothing out investment returns. Sometimes a specific activity shoots ahead of the trend and conversely another sector might under perform for a while. If you are ‘overweight’ in one area – this might have an unwanted bias on your overall plan. A good adviser will review your investment portfolio in line with your plans and requirements.
  4. Hope for the Best and prepare for the worst. Give thought to situations that might upset your plans, you don’t want to be tied into a long term investment that has exist charges if an emergency pops up.
  5. Few things in life are totally free of charges or obligations. A cash deposit might have no charges as such, but your money is being used by your Bank or building Society to generate income that you will not benefit from. On the other hand, an investment might produce a gross rate of growth that will be reduced by charges. It is important to understand the ‘net’ return after all charges. There are example where investments with the highest charges can still provide greater returns than a plan with very low charges!
  6. If you need your savings to grow by 10% per year to achieve your objective – you are likely going to take a high level of risk, this might be acceptable or if the risk is too great, another plan needs to be sorted out.
  7. It is all very well setting a plan in action, but circumstances can change. The reason you are saving might change, legislation including taxes can impact on your plan. Your health might change, your income might alter, and investment markets might change – on this basis I recommend setting up a regular review process to keep your plans on line.

A holistic financial review with an Independent Financial Adviser is a good start. 

Issued by Wealthline Limited, which is authorised and regulated by the Financial Conduct Authority.

Past performance is not a reliable indicator of future results and any forecast is not a reliable indicator of future performance.

The information contained in this editorial should not be construed as offering investment or tax advice.