Investing has never been easier, with apps and investment platforms allowing us to make a return on our savings, so we can build funds for the future. There are so many ways that you can make your money work for you, whether you’re new to investing or you are looking to diversify your portfolio – read on as we look at three investments you could make this winter.
Everyone should have a pot of savings to help them navigate emergency expenses, and you never know what’s just around the corner. Payday loans UK can help with an unprecedented expense, but having your own funds is essential so that you don’t disrupt your cash flow.
Why Should You Invest?
Investing is becoming more popular with many of us, but have you ever really stopped to think about why? You can use investing as a way of boosting your savings or as an additional income – but of course, you have to know where it is best to invest and how to do so safely. Investing is a way of making your money work for you and may end up more fruitful than you would find leaving it in a savings account over a certain length of time.
One of the issues that you will find with investing is that it, unfortunately, is not guaranteed that you will make a return. Depending on where and how you invest, the market is often volatile, meaning you could lose money just as easily as you could make it. Using investment platforms and doing your research before diving in means that you can give yourself the best chance of boosting your finances.
Things to Think About Before Getting Started
Before you decide to invest, there are a few things that you are going to have to think about to help you get started. First, you’re going to need to do your research so that you can come up with a plan. Your plan should help you to mitigate risk and spread your investments so that you’re not putting all your eggs in one basket – this could end up with you losing all your money.
You should also make sure you have a good understanding of the risk that your investments could have on your finances if you are struggling to make ends meet or you are in debt; investing could exacerbate this, so it is best to avoid it. Finally, make sure that you invest sensibly. Don’t listen to tips that others give you because only you know your finances and what works in your favor. Here are three investments to make this winter.
ISAs
An individual savings account or ISA is one of the best places to start if you think that investing would be suitable for you. They are a great option if you are looking to make money on your savings over a long period, as they allow you to produce tax-free returns, which makes them a better option for those that are saving than you would get with a cash savings account. If you have a lump sum, you could choose to save it in an ISA, or you could choose to invest monthly contributions as a way of consistently saving and building up your very own cash reserve to use when you need it in the future.
Value Stock Funds
Investing in value stocks allows you to invest in the stock market at a lower price than you may find with others. They are great if you do not mind riding out the volatility of the market and you’re looking to invest over the next few years, but you will need to give your investment time to ride out peaks and troughs before you can make a return. Although value stock funds may not be your thing if you’d rather invest in something a little more stable, these funds actually tend to be safer than others within the market because of their low price. In addition, these stocks tend to do better as interest rates rise, so it may be worth taking a look at investing your money in a value stock fund over the coming months.
Short-Term Bonds
Bonds come with fewer risks than you’d find with stocks, making them a better option for those that are not keen on losing their hard-earned cash. Short-term bonds are investments that mature over one to four years, and once this is reached, you will earn back the money that you invested, along with any added interest. These investments are lower risk and can be influenced by interest rates, like value stock funds. These bonds could be a good investment to investigate over the winter, as they do well during times of high-interest rates.