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Whether you should invest depends on your personal circumstances and the amount of risk you’re willing to take. But as a rule of thumb, you should invest for at least five years. This allows enough time to ride out any bumps in the market that might see you make a loss on your money. If you’re looking to use your money within the next few years, you should probably stick to cash savings. It’s important to understand that there’s no such thing as the best stocks and shares investment. Over the long run, historically, stocks and shares have outperformed money in savings accounts. But that’s no guarantee they’ll do so in future. Always remember, investments can go down as well as up.

The five golden rules of investing:

  1. The greater return you want, the more risk you’ll usually have to accept.
  2. Don’t put all your eggs in one basket. Try to invest in several different industries or countries – this is known as diversifying, and will help lower your risk exposure (the idea being that if one sector or country is doing badly, hopefully the others will do well and help keep the value of your stocks & shares ISA higher).
  3. If you’re saving over the short term, it’s wise not to take too much of a risk. It’s recommended you invest for at least five years. If you can’t, cash is often best.
  4. Review your portfolio. A fund might be a dud, a fund manager might leave, or you might not be willing to take as many risks as you once did. If you don’t review your portfolio regularly, you could end up with a stocks & shares ISA losing money.
  5. Don’t panic. Investments can go down as well as up. Don’t be tempted to sell or buy funds just because everyone else is.
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Jim Paul Associates Ltd

Mallan House
Bridge End
NE46 4DQ

T: 0191 2064131