Ten tips for first-time investors

Ready to get started on your investment journey?

Investing can help you grow your money faster than simply saving, but it can also be a little daunting knowing where to begin. You may think the volatile global stock markets may not be the ideal starting point for new investors, but it’s always a good time to begin investing.

The power of compounding returns over decades is potentially enormous if you save consistently and invest in the financial markets. You can start small but get started.
If you are contemplating investing and looking to take your first steps, we’ve provided ten tips to get you started.

1. Have a plan

To start off with, it’s important to have a plan for your investments. This means having an idea of what you’re trying to achieve and how you’re going to get there. Are you looking to invest for a specific goal? Are you looking to achieve investment growth, income or both? Ultimately without a plan, it’s easy to get off track and make decisions that aren’t in line with your investment goals.

2. Start small

You don’t need a large sum to start investing. In fact, drip-feeding what you can afford each month – or gradually whittling away a lump sum – could be beneficial during times of stock market turmoil and economic uncertainty.

Your money buys more shares at a cheaper price when the market falls, and fewer shares at a higher price when the market rises. This averages out the price at which you buy investments and, over time, could help to smooth portfolio performance.

3. Use your tax allowances

Remember your Individual Savings Account (ISA) allowance, which renews annually on 6 April. This currently amounts to £20,000 for the 2022/23 tax year. Investments inside an ISA grow tax-efficiently, which means more of your money goes towards achieving your future goals.

4. Be patient

Investing is a long-term process, that’s why it’s important to be patient. Don’t try to time the market or make decisions based on short-term fluctuations. Instead, focus on your overall investment goals and stick to your plan.

5. Diversify

As the saying goes, ‘Don’t put all your eggs in one basket.’ When you diversify, you spread your risk across different investments and sectors, which can help you weather the ups and downs of investment markets.

6. Review your portfolio

Your investment portfolio should be reviewed on a regular basis. This will help you make sure that your investments are still in line with your goals and that you’re not taking on too much risk with where your money is allocated .

7. Stay disciplined

Investing can be emotional, which is why you need to stay disciplined. Don’t let greed or fear influence your decisions. Instead, keep focused on your goals and stick to your plan.

8. Have a time horizon

When you’re investing, it’s important to have a time horizon in mind. This is the amount of time you’re willing to wait for your investments to grow. For example, if you’re investing for retirement, you’ll likely have a longer time horizon than someone who’s investing to fund a child’s further eduction.

9. Be prepared for bumps in the road Investing isn’t always smooth sailing.

There will be times, as we’ve seen in recent years, when the market is down or your investments don’t perform as well as you’d like. It’s important to be prepared for these bumps in the road and have a plan for how you’ll handle them.

10. Seek professional advice

If you’re not sure where to start or how to create a diversified portfolio, seek professional advice. We’re here to provide you with the guidance you need to make smart investment decisions and take your first steps.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.