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What are the best options for your savings?

Views • 14th Jul, 21

 
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Today we wanted to help answer the question: What should I do with my savings?

Whether you have saved or inherited £/$/€ investing it can be difficult, which is why it’s important you invest in the way that’s right for you.

In today’s world we have so many options that include deposit accounts, Fixed Term Deposit Accounts, Stocks and Shares, Funds, Gold, Pensions, Property, Cryptocurrency and many more. 

Because of the unlimited and confusing options people often keep their money in a cash account earning little or no interest. But this leaves savers exposed to inflation, which erodes the value of your money over time.

If you were to put your 100k into a savings account with a return of 1% after one year you would have 101k. If the Federal Reserve, Bank of England or whoever sets the inflation rate for your country manages to keep inflation around a 2% target, the value of the initial 100k would have fallen to 98k.

That means you would need to earn at least 2k to retain the purchasing power of your money!

That is why we help savers look at the financial markets to protect their money and grow it for the future.

Before we can start even looking at investing, we recommend our clients to pay off expensive debt and have at least 3 – 4 month’s salary saved in case of an emergency.

 Our next step is looking at your investor profile to achieve your financial goals and make sure it is in line with your risk approach. By understanding what you are saving for and the time scale attached enables us to build an investment portfolio and plan for the objectives.

As mentioned, this includes your attitude to risk, the higher risk you are the higher the returns, but that comes with higher volatility when the markets fall. An attitude to risk considers, your age, when you need to access the money, how much growth you expect, what you expect when markets fall and your attitude to short term volatility.

If you are more risk averse then you will have a high exposure to bonds in a portfolio, whilst those who want higher returns will have more equity positions. Most investors fall somewhere in the middle and have a fully diversified investment portfolio.

Top Tips to invest your money

Building a portfolio in line with your attitude to risk is important to start off and making sure its managed throughout the term is key to long term growth. Diversification is key, by spreading your money across investments, asset classes and geographies you should offset short term fluctuations.

This sounds simple but it can be difficult, time consuming and expensive to get right yourself, which is why many prefer to use an expert.

Here are some tips to help you along the way;

  • Create your Investor Profile
  • Diversify your investments in line with your attitude to risk
  • Keep costs low to maximise your returns
  • Make the most of local tax efficient investment options
  • Invest for the long term

To find out how we can help and hold a free initial consultation simply book an appointment using the below link;

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