As regular readers of our news items will know, we do tend to focus on issues that impact on those that already have mortgages, financial plans and pensions in place.
But the truth is much of the advice that we give is just as relevant to those starting out on their financial journey. In fact, where we can often be really useful to the younger investor is helping them avoid some of the pitfalls when there is so much choice available.
In this article, Andrew Hannay looks at some of the issues that younger investors should consider.
“Younger investors are able to access huge pools of information about all kinds of investments and various easy access dealing platforms give them simple and cost-effective ways of accessing the stock market.
Lockdown has given everyone the time to research and explore these things and so the chat goes round. Easy winnings, look at the excitement cause by GameStop and everyone knows how easy it is to make a killing on Bitcoin!
This leaves younger investors with a dilemma. How do you strike a balance for being steady as she goes or being too gung ho?
The long-term mantra for diversification and holding stocks and bonds; the main asset classes, still holds good but it may appear dull, boring and slow (an untrue reputation) compared to some of the new stuff coming out which might offer high returns over a short sprint.
We would counsel to avoid temptation and embrace diversification – choose various geographies, spread your sectors, use different management styles and use investment trusts (one of the UK’s best kept secrets), exchange traded funds and keep one eye on management and advisory costs.
Lastly, get in tune with your company pension. This needs attention – over 96% of these are in the wrong fund! The money to put aside now ends up being invested for over 75 years.”
If you are interested in learning about what makes RobMac different and think that we can help, then please get in touch. If you would like to discuss your financial position or mortgage further, you can arrange to meet online with one of our financial advisers by scheduling a meeting here >>
