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Investment Advice FAQ

What are the 3 principles of investing?

It is often said that there are three golden rules when investing. The first is that you need to save for a rainy day, that is to create a financial plan and stick to it. Secondly, you need to ensure that your investments are diverse enough to ride out any single particular economic storm and that you should go into the investment realising that capital is at risk and the values will fluctuate. The last one is that there is no such thing as a free lunch and that any investment and the adviser behind it must be carefully considered.

What is the golden rule of investment?

One of the most important rules of investing is to ensure that you have a properly diversified portfolio. The idea is to aim for a range of different kinds of investments, each one performing differently over time. This diversity strengthens your overall portfolio and reduces any overall risk.

What is better investing or trading?

In both case there is undoubtedly risk. However, trading is normally considered to be riskier than investing. It does often provide a higher return, but the risks can be high. Investing is a lot safer, but this is an art and is best left to an expert. Be sure to discuss the path you wish to take with your financial adviser.

What should you not do when investing?

There are said to be 8 common investing mistakes. 1) Is not understanding the Investment you are making and the risk involved. 2) Falling in love With a particular investment or company. 3) Not having enough patience. 4) Changing your investments too often. 5) Attempting to guess what the market is going to do with insufficient information. 6) Automatically selling an investment when it is dropping in value. 7) Failing to diversify your portfolio. 8) Letting your emotions rule all your decisions.

Can you lose money from investing?

Just as there is a risk of losing money when you invest in shares, investing in a fund can also result in losses. You can never be sure that you will not lose some of your investment, however, the duration of the investment, the assets held within and a regular review process which makes any changes required can severely mitigate against this risk . Don't invest money than you cannot afford to tie up for as long as is required to give the investment the chance to perform. Don't invest money than you cannot afford to run the risk of losing value.

What should I expect from a financial adviser?

A good financial adviser will be sure to ask you what your goals are, then going on to create a financial plan to help you reach them. This most often includes working out how much you should save for retirement on a monthly basis. Whilst also making sure you have an adequate emergency fund, offering tax-saving suggestions and helping you refinance or pay off debts.

What is the role of investment adviser?

An investment adviser is there to give advice to clients about how they should invest their monies. These investments will include securities such as stocks, bonds, mutual funds, or exchange traded funds. Investment advisers are also known as investment counsellors, investment managers, asset managers, wealth managers or portfolio managers.

What is investment advice?

Investment advice is defined as making any recommendations regarding an investor's portfolio. Many professionals offer this type of advice, these including financial planners and brokers.

What is the difference between an investment adviser and a financial adviser?

Most financial planners are in fact also investment advisers, but not all investment advisers consider themselves financial planners, as this requires a different skill set and type of experience.

The value of investments and income from them may go down. You may not get back the original amount invested.