10 Top Tips for New Investors

Back to School Week: New to investing? Our handy checklist of 10 top tips will help you get started

Holly Black 7 September, 2020 | 8:50AM
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1. Ask Yourself Some Key Questions

Why are you investing and for how long are just two of the questions you need to be able to answer before you put your money in the stock market. Are you hoping for a house deposit, saving for retirement or simply aiming to grow your wealth? Your investment goals will help determine which investments you pick and how long you hold them.

2. Work out Your Risk Appetite

If the thought of losing any money leaves you panicked, you might to want reconsider investing. Savings accounts may not offer much growth but at least your money is protected. Investing, meanwhile, comes with the very real risk that you could lose money. Of course, the idea is that you choose the investments that will help your money grow over the long-term but that doesn’t mean there won’t be ups and downs along the way.

Risk appetite questionnaires can be found online or through a financial adviser and help you work out how much risk you are willing to take, which will determine where you invest your money. Risk averse investors may opt for fixed income assets and steady dividend-paying funds, while those willing to take on more risk might choose racier emerging market equities and smaller companies funds, which can be more volatile but offer the potential for greater returns.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk


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