3 Nov 2022
Don’t fall victim to low interest rates and rising inflation. Putting some of your cash into investments might make your money go further
If your savings goal is for more than a few years, putting some of your cash into investments might make your money go further and help you keep up with inflation
What are investments?
Investments are something you buy or put your money into, in order to achieve a favourable return.
Most people choose from four main types of investment, known as ‘asset classes’:
· shares - you buy a stake in a company
· cash – the savings you put in a bank or building society account
· property – you invest in a physical building, whether commercial or residential
· fixed interest securities (also called bonds) - IOUs given in return for loaning money to a company or government.
The various assets owned by an investor are commonly called a portfolio. As a general rule, spreading your money between the different types of asset classes (diverse spread of investment) can often lower the risk of your overall portfolio.
Investment Risks
Sadly, there’s no such thing as a ‘zero risk’ investment. Even money you place in secure deposits such as savings accounts can risk losing value in real terms over time if it is outpaced by inflation.
It is usually a good idea to spread your risk by putting your money into a number of different products and asset classes. So, if one invest- ment doesn’t work out as you hope, you’ve still got others to fall back on.
When to start investing?
If you have a reasonable amount of money in your cash savings account (enough to cover you for at least three to six months) and you want to see your money grow over the longer term, then you should perhaps consider looking at your investment options.
The right savings or investments for you will depend on a range of different factors, such as your financial situation, life circumstances, risk appetite and your future goals. That’s something we can help you with.
Getting started
There are lots of things to think about if you're planning to save. Is it better to save or invest and what type of account should you choose?
Whether you’re new to saving or simply want to make sure you're making the most of extra cash by getting to grips with how interest rates and inflation affect your money, get in touch.
We would be more than happy to talk you through your investment options.
The value of investments and income from them may go down. You may not get back the original amount invested.