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Where do you get started with investing?

In this episode, Clare talks through some of the things to consider once you’ve decided you’re ready to invest. Like what level of risk are you comfortable taking? Are you looking for income, growth or a bit of both? Do you want a Ready-made Investment, to choose your own funds, or shares?

The value of investments can fall as well as rise; you may not get back what you invest. If you’re not sure about investing, seek independent advice.

Hello I'm Clare, and welcome back to Smart Investor the series that helps you get to grips with investing. In this episode, I'll be looking at some of the options once you've decided you're ready to invest but please be aware we can't offer personal advice. So, if you're unsure about investing do seek independent, financial advice.

With so many different investment choices available it can seem difficult to know where to begin. First of all, you need to consider why you're investing. For example, are you looking for capital growth or do you want investments that are going to give you a regular income. It's also important to think about how much risk you'll be comfortable in taking. There is risk associated with all investments as their value, and any income derived from them can fall as well as rise. But some options are riskier than others and there are ways to reduce the amount of risk you take.

Many people choose shares for their first investment but this can actually be quite risky as you're reliant on the performance of a single company. Opting for a fund could be a better place to start as your money will be invested in the shares or bonds of multiple companies. This diversification immediately helps dilute some of the risk. However, there are literally thousands of funds to choose from, so where do you start? Well it's often a good idea to start with the areas you're familiar with. That means you might want to look to investing in the UK, initially. And once you've found your footing on home ground you can think about investing in other international markets, if you want to.

It's important to do lots of research though because even if you've decided the type of fund you want there are still lots of options and performance can vary significantly. And bear in mind, that past performance is not a reliable indicator of future performance so don't base your decision on that alone. Investing always comes with a certain amount of risk whether it's from stock market volatility weakening currency, or rising inflation. But building a diversified portfolio can help provide you with some protection. You can do this yourself over time by picking different investments to put your money into.

Alternatively, if you want a one-stop shop that effectively does it for you, you could go for a ready-made investment. This type of product is typically made up of multiple funds, with exposure across a range of asset classes and regions of the world matched to a risk profile. It could be a good option if you're new to investing or don't think you'll have the spare money to build a diversified portfolio over the coming years. And even if you will, you may not want to do it yourself.

Over the longer term, investing in the stock markets tends to produce better returns than just keeping your money in cash, but this isn't guaranteed. So don't be put-off because you think it's complicated and requires too much hard work. There are options available to suit most types of people. The key is understanding how much risk you're comfortable with taking, and what you're investing for.

Thanks for watching. If you want to find out more information or watch any other episodes of Smart Investor please visit our website. We'll see you next time.

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