WEBVTT 1 00:00:02.800 --> 00:00:05.720 Hello, I'm Clare, and welcome to Smart Investor... 2 00:00:05.760 --> 00:00:09.040 the show that can help you get the most from your investments. 3 00:00:09.080 --> 00:00:11.120 Although we can't offer personal advice... 4 00:00:11.160 --> 00:00:14.160 we hope each episode will provide you with the insight and tools... 5 00:00:14.200 --> 00:00:16.320 you need to become a smarter investor. 6 00:00:17.360 --> 00:00:20.080 To give your investments the best chance of earning a return... 7 00:00:20.120 --> 00:00:21.680 you need to be patient. 8 00:00:21.720 --> 00:00:23.520 By committing to long-term investing... 9 00:00:23.560 --> 00:00:26.280 you give your money the greatest chance to grow. 10 00:00:26.320 --> 00:00:30.600 In this section, we'll take a look at slightly more advanced strategies... 11 00:00:30.640 --> 00:00:34.520 to help you stay invested and manage your portfolio's performance. 12 00:00:34.560 --> 00:00:37.240 Joining me to talk about it is Karen Barrett... 13 00:00:37.280 --> 00:00:40.680 the Founder and Chief Executive of Unbiased.co.uk... 14 00:00:40.720 --> 00:00:44.800 the platform that connects millions of people to professional financial advice. 15 00:00:44.840 --> 00:00:48.840 Karen, why is it so important to stay invested and to stay in the market? 16 00:00:49.720 --> 00:00:53.320 Historically, investments grow at a faster rate than savings. 17 00:00:53.360 --> 00:00:56.640 Particularly in this low-interest-rate environment... 18 00:00:56.680 --> 00:00:59.520 savings aren't really giving much opportunity for return. 19 00:00:59.560 --> 00:01:02.240 Although history isn't a prediction of the future... 20 00:01:02.280 --> 00:01:04.120 and there is a risk to investments... 21 00:01:04.160 --> 00:01:08.480 generally, the faster growth rate means an opportunity to grow your wealth. 22 00:01:08.520 --> 00:01:10.520 As you mentioned, there is a risk... 23 00:01:10.560 --> 00:01:14.280 there is a chance you could see the value of your investments fall. 24 00:01:14.320 --> 00:01:17.600 But is there anything you can do to help reduce that risk? 25 00:01:17.640 --> 00:01:21.160 Absolutely. There's a couple of ways you can reduce that risk. 26 00:01:21.200 --> 00:01:24.200 One is by diversifying the assets that you invest in. 27 00:01:24.240 --> 00:01:29.840 That means you're not exposing yourself to only one geographic area or sector. 28 00:01:29.880 --> 00:01:34.440 That means you're less affected by the stock market movements. 29 00:01:35.280 --> 00:01:38.160 You can also regularly invest into your investments. 30 00:01:38.200 --> 00:01:41.000 That means putting the same amount in each month. 31 00:01:41.800 --> 00:01:44.400 This also smooths stock market volatility. 32 00:01:44.440 --> 00:01:48.400 It means you can buy when the market is high as well as when it is low. 33 00:01:48.440 --> 00:01:51.560 But when it is low, and if you're seeing the markets fall... 34 00:01:51.600 --> 00:01:53.360 and the value of your investments fall... 35 00:01:53.400 --> 00:01:56.920 it's understandable why a lot of people can lose their nerve... 36 00:01:56.960 --> 00:01:58.400 and want to sell out. 37 00:01:58.440 --> 00:02:01.040 How can you reduce that temptation to get out? 38 00:02:01.080 --> 00:02:05.400 Absolutely. It can be alarming when you see the value of investments falter. 39 00:02:05.440 --> 00:02:08.120 I think the main thing really is to remember... 40 00:02:08.160 --> 00:02:10.880 you're invested for the medium and long term... 41 00:02:10.920 --> 00:02:14.400 and there will always be dips and peaks in the stock market... 42 00:02:14.440 --> 00:02:18.040 and the general trend is to look for an upward growth trend. 43 00:02:18.080 --> 00:02:20.960 Of course, it can be really hard to time the market. 44 00:02:21.000 --> 00:02:22.520 You need to be really careful. 45 00:02:22.560 --> 00:02:25.320 When is the right time to take your money out of the market? 46 00:02:25.360 --> 00:02:28.200 And again, when's it the right time to put back into the market? 47 00:02:28.240 --> 00:02:31.320 You could easily miss some of the best performing days, 48 00:02:31.360 --> 00:02:33.880 as well as avoid some of the worst performing. 49 00:02:33.920 --> 00:02:37.520 So be very, very careful when you're thinking about doing that. 50 00:02:37.560 --> 00:02:41.200 Additionally, where are you going to put your funds if you take them out? 51 00:02:41.240 --> 00:02:43.240 What are you going to do with them? 52 00:02:43.280 --> 00:02:47.600 There could be a potential cost impact of moving money in and out to consider. 53 00:02:48.480 --> 00:02:50.800 Obviously it's about holding your nerve. 54 00:02:50.840 --> 00:02:53.760 Presumably it's not just a case of putting your money in 55 00:02:53.800 --> 00:02:55.200 and then doing nothing? 56 00:02:55.240 --> 00:02:59.120 No, absolutely. You should always keep tabs on your investments... 57 00:02:59.160 --> 00:03:02.200 and check they're doing what you'd expect them to do. 58 00:03:02.240 --> 00:03:05.920 It's also a really good idea to schedule in some regular reviews. 59 00:03:05.960 --> 00:03:09.360 Measure your investments against your plan and your goals. 60 00:03:09.400 --> 00:03:12.880 Also, if you are worried about your investment performance... 61 00:03:12.920 --> 00:03:16.840 or have questions on where you should be investing next or your strategy, 62 00:03:16.880 --> 00:03:19.400 you should seek independent financial advice. 63 00:03:19.440 --> 00:03:22.440 They can really help you, they're experts in that area... 64 00:03:22.480 --> 00:03:25.360 and can give you confidence that you're doing the right thing. 65 00:03:25.400 --> 00:03:26.840 Thank you very much for that, Karen. 66 00:03:26.880 --> 00:03:30.800 To explore a little more about the principles of staying invested... 67 00:03:30.840 --> 00:03:32.600 visit our website.