Everything You Need To Know Before Starting To Invest

The world of economics can be complex and difficult to understand, especially for those who have little knowledge about financial matter or never approached it. However, today, many people are deciding to start a new economic path by investing their capital.

But what drives them to enter the financial world? Usually, investors are driven by the desire to see money grow and mature over the years. And this is exactly the purpose of investments: buying properties, ETFs, cryptocurrencies to sell them at a higher price, in order to generate great economic growth.

However, what many first-time investors may don’t know is that investments can be risky and lead to the opposite effect. As a matter of fact, the result of any investment depends on an infinite number of unpredictable factors, such as the volatility of the market and its constant fluctuations.

That’s why when you start investing you don’t have to assume that your investments will go well and that you will be able to grow your money. On the contrary, your predictions could be wrong and might lead you to a loss, even a significant one.

That’s why it is crucial to embark on this new journey with caution and, if needed, to seek the help of a financial advisor. Indeed, financial advice is very important, and today represents a way to be more conscious about your economic moves.

Nowadays, you can also rely on some algorithm-driven digital platforms called robo-advisors, which have been designed to help investors manage finances, building a strong investment portfolio.

Moreover, investing with a robo advisor sometimes gives the investor the chance to automatically invest money according to his budget and profile. 

Why Is Seeking For Financial Advice So Important?

Before investigating the universe of financial portfolios and their key role in an investment journey, let’s have a look at what financial advice is and why it is so important for any kind of investor.

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First of all, along with financial planning, financial advice can help you figure out whether it may be a good idea for you to start investing your savings or not.

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The experience of an advisor will guide you through any important economic choice and will help you build, piece by piece, your financial portfolio according to your own needs and risk profile.

Robo-advisors can be useful as well, and they represent a viable option since you can rely on their help without leaving the comfort of your home.

In fact, a robo-advisor will be able to add assets to your portfolio according to your profile: this is possible thanks to an online survey which will contain all the most important information about your financial situation and your economic preferences. 

The Financial Portfolio

We have mentioned the financial portfolio several times, but what is it really about? And why is it so important to investors?

A financial portfolio, which can also be called an investment portfolio, is a collection of assets, properties, and other financial items on which you will have to base all your investment moves. In building a smart financial portfolio able to generate growth and minimize risk, diversification is absolutely crucial.

As a matter of fact, by including investments from different economic areas within the portfolio, you will help to minimize the impact that a badly performed investment has on other investments made in other areas. This way, if one of your investments were to lead to a loss, it would have no impact on the other investments.

What Can You Invest In If You Live In The UK?

Today, if you have decided to start investing your savings, you can choose from many different investment areas and opt for those that are closest to your needs and preferences.

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For example, you can invest in stocks, shares, bonds, and commodities, which today are the most common choices among novice investors. You also have the opportunity to invest in ETFs, gold ETFs and cryptocurrencies, which are very popular today among younger investors.

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Finally, retirement plans are another popular choice, as it represents a way to invest in the future for those who are planning their retirement years ahead. To do that, investors can opt for a regular investment account or for a GIA, which is a General Investment Account designed to let the holder invest outside of tax wrappers.

Also, Individual Savings Accounts are becoming a widespread investment vehicle, since they are meant both for investments and savings, while providing tax-free interest.

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Jonathon Spire

Jonathon Spire

Tech Blogger at Jonathon Spire

My diverse background started with my computer science degree, and later progressed to building laptops and accessories. And now, for the last 7 years, I have been a social media marketing specialist and business growth consultant.

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Jonathon Spire

I blog about a range of tech topics.

For the last 7 years I have been a social media marketing specialist and business growth consultant, so I write about those the most.

Full transparency: I do review a lot of services and I try to do it as objectively as possible; I give honest feedback and only promote services I believe truly work (for which I may or may not receive a commission) – if you are a service owner and you think I have made a mistake then please let me know in the comments section.

– Jon