7 timeless investment principles
Discover the seven essential investment principles that could help you reach your investment goals.
When you're unsure of what the stock markets will do next, don't panic. Whether you are in regular contact with your financial adviser or not, here are seven timeless investment principles to stick to that should see you through the ups and downs of the markets.
- Keep to a sound, personal financial plan. This is crucial. You put a plan in place for a good reason, so keep focusing on your end goals and try not to let market noise sway you.
- Invest at regular intervals over the long term. Keep on investing through market lows when share prices are undervalued, so that you gain more wealth when markets rise again.
- Understand your time horizon and your attitude to risk. They affect how you invest. The younger you are and longer you have to invest, generally, the more risk you can take.
- Diversify your portfolio so that when one part of the market does not perform it is balanced out by another part of the market that does. View your investment portfolio as a whole.
- Balance your portfolio. Maintain a sensible balance between different types of investments. There will always be times when one asset class outperforms another. Generally, cash and bonds provide stability while shares and property provide growth.
- Think long term. It is time in the market that counts – not timing the market. The longer you are invested in the market, the better the likelihood of making up for any losses. What's more, the sooner you start saving, the more you will benefit from the miracle of compound growth.
- Remember you are unique. What's a good investment for one individual is not automatically a good investment choice for you, so try not to follow the latest investment trends unless they fit with your plan.