Are you considering making investments for the first time? Unsure where to start? Then you’re in the right place! We’ve put together these handy top tips for beginners wishing to build an investment portfolio, explaining the basic things you should consider. Of course, making any kind of investment carries a degree of risk, so it’s important to fully understand these before parting with your cash.
Set realistic goals
Firstly, you should set realistic investment goals. To do this you’ll need to know exactly how much capital you want to invest, as this will dictate the types of investments you should and shouldn’t make. You need full visibility of your finances, not only in the present but also any future financial commitments you have.
Once you know how much you can realistically invest, you should establish how much time you want to commit to your investments. Are you looking for short, medium or long-term investments? This will likely depend on your age – for example those that are retiring may not wish to make extremely long-term investments, but twenty-somethings just embarking on their career may be in it for the long haul.
Choose the type of investments to make
There are many different types of investments you can make across the financial markets, from stocks and shares to bonds. Each investment type comes with it’s own opportunities and risks, so it’s vital to understand these before making a decision on what to invest in.
You need to establish how much risk you’re willing to take on. Some investments have much higher associated risks than others, but on the flip side they can offer some of the best returns. The key is to figure out how much risk you’re comfortable with. If you’re not reliant on this money for the future, it’s likely you can take greater risks – while those that need to heavily protect their investments may need a low-risk strategy.
Get advice from an expert
If you’re new to investing, you’ll need to get advice and support from an expert in the financial industry. There are lots of specialist companies out there that can offer you advice as well as investment management and trading services. For example, companies like Tickmill have a team of trading experts that can work across financial markets to help you achieve your investment goals. Whether you’re interested in stocks, shares, hedge funds or anything else, it’s important to speak to experts like this who can explain the benefits and risks of various investments. This is because certain investments are not suitable for certain people – particularly greater risk investments which can see fluctuations in value.
Of course, making the right investments can reap huge rewards, and can be a great way to save long term. Once you understand how much you can invest, how long for and the risks you’re willing to take, you can start to plan which investments will be right for you.
