At some point in life, people may think to start investing their money instead of just saving it. This desire comes from the ambition to give one’s capital the chance to grow and to gain an economic return. Even though this alone might seem a good strategy to ensure a more stable financial future, first time investors but also “old” ones should always keep in mind that every kind of investment comes with a risk. Of course, when you start investing your money, you’re giving it the chance to grow, but you’re also endangering it. That’s why you should always set a solid financial strategy before you even start to invest your capital. Keep reading to find out some tips and information useful for your investment journey.
1. The importance of planning your investments
To create a good economic plan is crucial because it allows you to have your financial situation under control and to reduce potential risks as much as possible. Any financial advisor would tell you that one of the best and safest way to start investing your capital is to identify your life and economic goals in order to turn them into a solid strategy for your future. Secondly, a good way to minimize any risks connected to your investments is to create a savings portfolio, which is a collection of assets and properties in many different fields. Let’s have a look on the many types of investments currently available in the UK. You can also check this article to go deeper into this matter.
2. How many types of investments are there?
When you start your new financial journey, you have to choose the investments areas for your situation according to your ambitions and economic goals. Even though it can be hard for first time investors to figure out the best area for investments, they might also think to investing money in more than one field. As a matter of fact, diversification is crucial to create a solid portfolio and it represents one of the best ways to minimize any risk. This way, one investment performing badly won’t affect the others in any way. Let’s have a look on the most popular kind of investments.
- Stocks (or equites or shares) are currently the most common kind of investment. By acquiring a stock, your goal will be to see the price go up. This way, you will be able to sell it back in the future for a higher price. Of course, the price might also go down due to the market constant swings.
- Pensions Funds are another type of investment you can include in your financial portfolio. By investing in a retirement plan you’ll be saving money for your future and you’ll also have the chance to get back more than you deposited.
- Commodities, which are physical products you can invest in, are really popular among investors. When you invest in commodities, you’re basically buying assets like metals, livestock, and agricultural goods.
What is a GIA?
A GIA is a General Investment Account, a particular and flexible account which gives the holder the chance to make a great variety of investments in many different fields. This specific type of savings account could be a good choice for people who already own an ISA (which is an Individual Savings Account) and used up the annual allowance. Also, this type of account is opened by people under the age of 55 who haven’t reached their retirement age yet and want to have free access to their money. Unlike a pension funds, a GIA lets the holder withdraw his money at any time with no restriction. This particular kind of account is available for all UK residents over the age of 18.