Step 1 Understanding investing
New to investing? We’ll help by explaining the different types of investments available. We’ll also give you information to help you make your own investment decisions.
Before you start, it’s important to ask yourself these questions:
- Are you happy with the risk that you could lose money?
- How long are you prepared to commit your money for?
- Have you set aside a reasonable amount to keep in cash savings, so you don’t have to sell your investments at a loss if short / medium term emergencies arise?
- What are your reasons for investing?
- Are you making the most of your tax allowances?
Things to remember
- All investments carry an element of risk. Their value can fall as well as rise, and you could get back less than you invested. You could get back nothing at all
- You should think about investing as a medium- to long-term commitment. If you can’t commit your money for at least five years, investments may not be right for you
- This is because, in a typical economic cycle, five years may be enough time to recover from significant downturns in the market. Of course, this isn’t a guarantee – you can still get back less than you initially invested after this time.
- If you are unsure about whether an investment is right for you, please seek independent advice.