The financial markets have taken a hit over the past few years. But, by following a clear investment strategy, you can still make money from your investments.
It takes thoughtful and careful planning though. Investigate your options; speak to experts; read reviews of financial products; look at how investment products have performed over the last few years – and decades; and then speak again to experts. Before risking your money, it is imperative you are fully aware of the good, the bad and everything in between.
Some questions you need to ask – and answer – before making any firm decisions:
1. How much are you looking to invest?
The amount you have to invest will have a bearing on the most suitable product for your needs. Consider carefully how much you can afford to tie up.
2. Why are you investing?
Do you need a quick injection of cash? Are you saving for the future? Are you keen to be more tax efficient?
3. How long are you willing or able to wait to see a return on your investment?
Putting money into the property market is generally seen as a long term investment while stashing money into a building society account gives short term certainty.
4. How much of a risk are you comfortable with taking?
Higher risk investments usually reap higher rewards but you have to be comfortable with those risks.
5. Can you afford to lose any of the money you are looking to invest?
If you invested in property and the property market crashed are you willing and able to wait for a recovery or to soak up the loss?
6. Who will receive the returns on your investment?
Are you investing for yourself or for family members? There are tax efficient ways of investing for your children or grandchildren.
7. Do you need access to your cash?
Some investment products allow you to withdraw money easily, some tie it up for many years.
8. Is this the start of regular investment?
Will you be able to top up your investment regularly – some products give extra incentives in return for regular cash injections.
9. Are you investing personally or as a business?
This could make a difference to the best strategy.