Top Tips for New Investors – Expert Advice | Personal Finance | finance

Many people are often afraid to take the first steps to invest, mainly due to concerns about financial loss. But there are ways to eliminate this fear-based indecision by investing sensibly. Against the background of the rising cost of living, now is the time to do what you can to increase your money. While it may seem inconsequential as the bills continue to deteriorate; High inflation actually provides a good opportunity to start investing, according to one expert.

Inflation drains the value of your money and the worst thing you can do is let it go down in a bank account.

Tom McGilllycuddy, co-founder of CIRCA5000, said: “By investing, you can protect your savings from this impact and have the money do the work for you.

“It is important to realize that investing is very rewarding if you stick with it for the long term. It is by no means a get-rich-quick scheme, but a smart way to put your money into circulation so that it builds up over time.”

Investing requires patience, and in the long run, your investments can weather volatile economic trends such as rising inflation.

Mr McGilllycuddy said: “When you take this approach, impact investing can actually be the best way to achieve this – combining profit with purpose.

Read more: How to “Maximize” Returns Amid the Cost of Living Crisis

“With industries like clean energy and sustainable food growing – and outperforming traditional industry players over the long term – achieving competitive returns should not come at the expense of people or the planet.”

Investing can be risky and knowing where to start may seem complicated and stressful to some, so Express.co.uk spoke with Mr. McGlicody, former investment banker at Barclay, to get his top tips to help you start your investment journey.

Think long term

The best way to make money from investing is to stick with it for the long term. Five years is usually a good place to start, but the longer the better.

Mr McGilcody: “Starting early allows the vehicle to really take effect – earning returns on your returns. For example, if an 18-year-old invested £100 in an account at five percent interest and did nothing else, he would have earned £1043 by The time he retired at 65.

Setting up an investment on autopilot, where a set amount of your paycheck will go out each month into investments, will reduce the risk of emotional decision making and ensure a steady increase in your savings with minimal effort.

Diversify your portfolio

It is important not to put all of your eggs in one basket. Distributing your money across different countries, companies, industries, and investment types — such as stocks, shares, bonds, and cash — will reduce your risk if an investment falters.

Mr McGlicody said: “It creates a smoother path to returns because when the value of a particular investment fluctuates, your public finances will not take a dramatic turn.

“This does not mean buying a lot of different individual stocks in the market. This approach can come with a high price tag (typically around £10 per trade plus stamp duty) and requires a lot of effort and expert knowledge.

A good option for beginners is exchange-traded funds (ETFs), a type of fund that allows you to buy a basket of stocks that fit a set of rules, called an index, rather than the stocks being selected individually by the fund’s management.

“Not only does this reduce cost, but it is an effective way to diversify your portfolio across different topics and sectors.”

emergency fund

Once you start investing, it may seem tempting to invest as much of your money as possible into investments to increase your returns and avoid inflation.

“While the investments are rewarding in the long run, it is also important to keep an emergency fund in a bank account so you can withdraw cash if an unexpected cost arises, such as a broken kettle, the loss of your job, or unexpected health care bills,” said Mr. Mcgillycuddy.

Markets fluctuate all the time. Even if the fund is generally on an upward trajectory, there will always be ups and downs.

“You don’t want to get bogged down in having to sell your investment when the fund price is temporarily down,” McGillicudi said.

Invest in the companies of the future

Investing in sustainable and impactful companies is not only a nice thing to do – it is also a somewhat strategic move that is more likely to pay off.

Mr. McGlicody said: “At CIRCA5000, our focus is on impact investing, which means investing in businesses that make an active positive contribution to people and the planet.

“Impact investing is just as profitable as traditional investing and often for two reasons. First, these companies are often better equipped to deal with emerging issues such as climate change or regulation around social issues such as gender equality.

“Second, these companies provide innovative solutions to the world’s problems that need solving, and are therefore well positioned for future growth – which means greater returns on your investments as well as a positive impact on the world.”

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