Want to improve your investments?
Here are 5 smart ways to help you get better results.
1. Keep costs down
Simply put, the more you pay in costs, the more of your investment returns you give up.
Higher-charging investments won’t guarantee you higher performance — whatever anyone claims.
In fact, high costs should often be seen as a warning sign.
Many “expert” investment managers charge chunky fees but produce lower returns than the stock market.
It’s why we’re fans of low-cost exchange-traded funds (ETFs).
Instead of trying to beat the stock market, ETFs simply aim to track the performance of an investment index — and most do a pretty good job.
Plus, their lower fees mean you keep more of the investment gains.
Think eggs and baskets: spreading your bets so you’re not depending on just one share or investment doing well.
Diversifying your investments should bring smoother returns over time.
And it means you’re not over-exposed if an individual share falls.
An ETF tracking, say, the UK’s FTSE 100 index, gives diversification across a range of companies and industry sectors.
But don’t stop there! Different investment types react differently to economic events and environments.
So for real diversification, invest in a mix of ETFs tracking different assets and markets around the world.
Rebalancing is about fine-tuning your mix of investments.
As stock markets rise and fall, some of your investments will do better than others and the overall balance of your portfolio may shift.
That can result in lower investment potential and/or higher risk going forward.
By rebalancing, you reduce the size of some holdings and increase others to put your investment plan back on track.
4. Use an ISA
As with keeping costs down, minimising tax can have a big impact on your returns.
Tax-free ISAs should be a first step on most investment journeys. (There’s more on this via ‘Why an ISA is nicer’).
5. Let InvestEngine build and manage your portfolio!
Our investment approach at InvestEngine combines low costs, wide diversification, and disciplined rebalancing.
We’ll build an investment portfolio to suit your needs.
You’ll get a handpicked selection of low-cost ETFs, invested across financial markets in shares, bonds and other assets like gold.
Then we’ll take care of the ongoing management of your portfolio, regularly rebalancing to maintain the agreed risk level.
And we’ll do all this for an ultra-low management fee of 0.25% a year (ETF costs also apply).
Plus, there are no dealing fees — and we don’t charge anything extra for investing via a tax-free ISA.
So for a low-cost, diversified, professionally-managed portfolio, invest better with InvestEngine.
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.