A time-tested method for controlling risk over time It’s natural to be looking for ways to smooth out your portfolio’s returns. Investing regularly can smooth out market highs and lows over time. In a fluctuating market, a strategy known as ‘pound-cost averaging’ can help smooth out the effect of market changes on the value of… Continue reading Pound-cost averaging
Category: Investment
New Individual Savings Accounts
Providing you with increased simplicity and greater flexibility Individual Savings Accounts (ISAs) have been around since 1999, providing a tax-efficient wrapper for savings and investments. However, in the recent Budget, the Chancellor, George Osborne, promised to increase the simplicity and flexibility of ISAs. As of 1 July 2014, there is now a single ISA which… Continue reading New Individual Savings Accounts
Open-ended investment companies
Investing in a variety of assets to generate areturn for investors Open-ended investment companies (OEICs) are stock market-quoted collective investment schemes. Like unit trusts and investment trusts they invest in a variety of assets to generate a return for investors. An OEIC, pronounced ‘oik’, is a pooled collective investment vehicle in company form. They may… Continue reading Open-ended investment companies
Principles of diversification
Minimising exposure to volatility and market setbacks Investing would be easy if markets rose in a straight line. Unfortunately, that is rarely the case. Over the long term, assets such as shares and bonds have tended to produce positive returns, but there have been several bumps along the way. In any event, past performance of… Continue reading Principles of diversification
Why are you building an investment portfolio?
Every investor is unique, but everyone faces the same trade-off between risk and reward The best place to start when you are looking to build a diverse investment portfolio is to ask yourself why you’re building a portfolio. For most of us, the central task is to build a pot of money that involves you,… Continue reading Why are you building an investment portfolio?
Reducing investment risk
Choosing a broad spread of instruments in which to invest If you require your money to provide the potential for capital growth or income, or a combination of both, and provided you are willing to accept an element of risk, pooled investments allow you to invest in a large, professionally managed portfolio of assets with… Continue reading Reducing investment risk
A higher return on your investment
Invest as much of your annual ISA allowance as you like in either a Stocks & Shares ISA or a Cash ISA, or any mixture of the two Some people never look beyond Cash Individual Savings Accounts (ISAs), but by using Stocks & Shares ISAs too, you could get a higher return on your investment.… Continue reading A higher return on your investment
Open-ended funds
Professionally managed collective investment funds Unit trusts and open-ended investment companies (OEICs) are professionally managed collective investment funds. Managers pool money from many investors and buy shares, bonds, property or cash assets and other investments. An open-ended fund could be visualised as a big pool of money – the money belongs to thousands of small investors.… Continue reading Open-ended funds
Building block of many investor portfolios
Investing in bonds, pooling your money with thousands of other small investors Bonds are debt issued by either a government or a company and are an essential building block of many investors’ portfolios. When you buy a bond, you are effectively extending a loan to the issuer of the bond. The issuer agrees to pay… Continue reading Building block of many investor portfolios
Regular portfolio reviews
Alternatives for income-seekers during a period of low interest rates One of the tools available to the Bank of England to stimulate the economy is interest rates. Lower interest rates mean that it is cheaper to borrow money and people have more to spend, hopefully stimulating the economy and reducing the risk of deflation. This… Continue reading Regular portfolio reviews
