1. Turn your back on cash
If you were fortunate enough to add to your cash savings in last year’s lockdowns, congratulations!
However, with interest rates at record lows, those higher savings sitting in your bank are likely to be earning next to nothing.
Instant access accounts offer just 0.12% on average, according to Bank of England data*.
Want the opportunity to earn more? Why not start this year with a plan to invest your extra savings in the stock market?
2. Look beyond the short-term
Understandably, you may be concerned about the risk of shifting savings out of cash and into the stock market — especially given all the uncertainty around.
But, as the investment saying goes: “It’s about time in the markets, not timing the markets”. In other words, investing is for the long-term. Your best chance for making money is to stay invested for many years, rather than worrying about whether now is the best time to invest.
If fear of stockmarket volatility is holding you back, here’s a tip: don’t invest everything in one go. Consider investing your cash over a period of time, whether on a monthly basis or in a series of lump sums.
This phased approach reduces the stress of worrying about timing and helps you stick to the investment plan.
3. Keep your fees down
Paying too much in investment costs damages your returns. Simply put, the more you pay, the more of your returns you give up, especially as the impact of costs compounds over time.
So start 2021 by checking how much you are paying in investment costs and make sure you’re getting value for your money.
4. Make it easy on yourself
Thankfully, these days you don’t need to be a professional investor to have your money work harder for you.
At InvestEngine, we’re all about making investment easier. Simply fill in our straightforward questionnaire about your aims and attitude to risk, and we’ll build an investment portfolio to suit you.
Our approach to investment applies best-practice portfolio management, with regular reviews of your portfolio to keep it aligned to your investment goals.
We offer a Personal Account or tax-free ISA for individuals, and a Business Account for corporate investors — all with the choice of Income or Growth portfolios.
Our management fee is just 0.25% a year (plus the costs of the ETFs our portfolios invest in).
*Source: Bank of England, data for November 2020, published 4 January 2021.
Capital at risk. The value of your portfolio with InvestEngine can go down as well as up and you may get back less than you invest. Eligibility to invest in an ISA depends on personal circumstances. ISA tax rules may change in the future.
This communication is provided for general information only and should not be construed as advice. If in doubt you may wish to consult a professional adviser for guidance.