With savings rates at a historical low (although there is talk that they may rise slightly), you may be looking at different ways at protection your hard earned money. Investing is a more adventurous approach with you savings that might be the way forward?
Purchasing stocks and shares is one way to do this. Stocks and share purchase is seen as a long-term investment. Long-term is five to seven years plus. It may pay you to take a risk and branch out from a standard savings account. Some may say that you are open to “inflation risk” by keeping your money in a savings account. The interest paid to you is less that the rate of inflation, so your money is losing it buying power in real terms each year.
Where is the value when investing in stocks and shares?
You return comes in two forms-
If the company you have invested in stays profitable it will pay you a dividend. The dividend amount depends on the type of share that you hold. Payments are usually made two times a year and you normally have a choice of taking the money as cash or reinvesting it in more shares with the company.
The value of your share may go up in value. There are many reasons why the share price may change. This may be-
- Size of their market share.
- Experience of the management.
- Brand identity and its popularity within its market.
- Company profits.
- Market sentiment.
The share price is often driven by expectation of the company’s performance. It will rise if there is significant interest or if traders have high expectations that the business will do well. Likewise the value of the shares may fall if it is felt that the company is not doing well.
If you decide to invest.
The following point are worth considering-
- You can lower your exposure to risk by diversifying your investments. That saying of “not putting your eggs all into one basket” stands true.
- Invest for the long term. That’s five to seven years plus.
- Be fully aware of your tax position and how your investment may impact on this.
- Be aware of the fees and charges. Look for value. Cheapest is not always best.
- Regularly review your investment portfolio.
Investing in stocks and share can provide a higher return than cash that’s held in a savings account, as long as it’s viewed as long-term
What are the downsides?
The downsides are that there are no guarantees. You may not get some or all of your money back if you withdraw you investment at the wrong time.
How Anstee & Co can help you with investing.
Our financial advisers can help you. We are independent financial advisers (IFA’s). We will look at your situation and find out what you are trying to achieve. Importantly,we will find out your attitude to risk. Our recommendation will only be made when we fully understand your situation.
Our financial advisers cover, Northamptonshire, Bedfordshire, West Midlands, Lincolnshire and Warwickshire. We have offices in Kettering, Stamford, Birmingham and London. We also make use of meeting rooms in Towcester, Northampton, Warwick, Grantham and Warwick. Meeting can also be arranged at your home or place of work at a time that is convenient to you.
Why not contact us today to see how we can help you.