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With banks constantly lowering the interest rates they offer to customers, it’s little wonder that so many of us are investing our money in stocks, bonds and other assets instead.

The potential returns are so much greater, and although we realise that the value of our financial investments may go up as well as down, if we can afford to keep our savings tied up in the market for a good few years, there’s a good chance that they may provide us with a convincing addition to our pension plan when they finally pay off.

financial investments

Like any good money-making scheme, however, managing your investments requires care and attention. First of all, it goes without saying that you shouldn’t invest more money than you can afford to lose. Investing is a gamble and there are no guarantees that you’ll get back what you put in, let alone turn a profit. However, unlike conventional gambling, you have a level of control over the risks you take. The more you know and understand about trading, and the more you’re prepared to be actively engaged, the better your chances will be.

Risk tolerance

Some investments are by nature safer than others, but they are also unlikely to increase in value dramatically, or overnight. In these cases, you’re in it for the long haul, and should be prepared to leave your money untouched for at least five years before you start to see a reliable return. Your investment may lose value during this period, but the longer you wait, the more time there is for the value to increase again.

These investments are best for someone with a fairly low risk tolerance. There’s no shame in this: you’re already demonstrating that you’re happy to live dangerously to some extent by investing at all. For the truly devil-may-care, however, there are many other risky short-term investments that are more closely related to casino gambling – that is, you may make a large profit in a short period of time, but you may just as easily lose everything.

A careful balancing act

The professional daredevil knows that balance is everything, and in this respect, investing is no different to walking the high wire. The best combination of security and profit potential comes from having a diverse portfolio that combines both high-risk and low-risk investments. The exact combination again depends on your temperament and experience, but your portfolio should contain a mix of different asset classes and investments in different sectors and even countries.

Choosing a broker

A big part of looking after your investments is choosing a broker that you can trust and that offers the right deal for you. Your best bet is to go to a reputable comparison site such as https://www.wecomparebrokers.com. Here, you’ll find reviews of the best online brokers, tips to avoid fraud, and side-by-side comparisons detailing exactly what different brokers offer, as well as the fees they charge.

When choosing a broker, you should obviously look at how much commission they charge and at contract fees, subscription fees and other hidden charges. Do you have to pay to transfer funds out of your account? Is there an inactivity fee if you don’t trade for a while? These are all common types of fees, but it’s just as common to find a broker that doesn’t charge them.

It’s your decision

Find a trustworthy broker registered with the appropriate bodies, and make sure that they offer the services you need and won’t charge you extra. You may benefit greatly from access to educational tools like articles and tutorials, but an experienced trader will be more interested in the latest analytical tools and software. There’s no single solution for everyone, so shop around until you come across a broker that meets all your criteria.

Staying safe

Financial fraud is much rarer than most people think it is and most online brokers are reliable and trustworthy. That said, if an offer seems too good to be true, it probably is. Always research thoroughly before you hand over your money to anyone, and never underestimate the lengths that fraudsters will go to in order to seem convincing. Don’t be afraid to ask awkward or “silly” questions. Genuine agents will respect you for being cautious, while anyone who tries to make you feel foolish for asking or needing more time to think about it is probably up to no good and should be dropped immediately.

There’s no guarantee that your investments will always meet your targets, but it is possible to give them the best chance of prospering. Due care and attention goes a long way, and knowing exactly what your goals are is the first step towards achieving them. 

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