img
img
MyMoneyHelp.co.uk
Sign up for our newsletter!
Name:
Email:

MyMoneyHelp
Credit Reports
Personal Loans
Mortgages
Insurance
Debt Help
Credit Cards
Banking
Utilities
Mobiles
Broadband
Education
Education
Banking
Credit Cards
Debt Help
Insurance
Mortgages
Loans
Credit Reports
Broadband
Investments
Pensions
Mobiles
Utilities
Glossary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investing 101
Investing 101

Investing implies, at least, repayment of cost, in some form.  That Genesis CD will never return the £15 you spent on it, but it will keep your teenage son out of the house.  Financially investing implies a return in profit.  That Rolling Stones LP you bought in '73 for £1.50 will now go for £50.  Successful investing, then, is child's play: stick all your money in a government gilt and skim of the (meagre) profits.  Most investors, though, through investing want to maximise the profit they achieve whilst minimising risk. This is the skill to successful investing. In order to do this, the average person will create an investment portfolio which will most likely invest in one of many stocks and funds.

What are funds?

  • Funds are exactly what they read – they funds things.
  • Funds are the collected capital of people who willingly invest their money into to it and expect the people who manage it to return a healthier profit than they themselves could manage on their own. This collective capital is then used to create a return.
  • Fund managers can invest in other funds or loan their capital out at a premium or buy shares in a company that intends to make money.
  • Funds can invest in stocks or bonds.

Obviously an individual's investment portfolio can do this, too, but in joining funds you are spreading your money to invest in a myriad of portfolios.  An individual investing £1000 in 1000 businesses would never make money; the fees alone would cripple them. But a million people investing £1000 pounds have economy of scale on their hands.

This is the trick to investing in funds: picking the right funds and balancing your investment portfolio.

For most investors – the casual amateur – investing in a balanced portfolio will involve handing over control of their money to a financial advisor. This person or organisation will have training in financial matters and be more experienced in market performance than the average investor. He/she will also have access to more alternatives: investing in hedge funds for example, which have stricter membership requirements.

For most people contemplating investing their primary concern is to secure a higher rate of return than they would otherwise achieve on their own. Their other prime consideration is to minimise exposure to risk.

For this reason the average investment portfolio will spread the investors' money between high and low yield funds, high and low risk investment, and long and short term return. 

The reliance on minimising investment risk can result in virtual negation of profit if handled poorly, hence prudent investors taking their investment portfolio to the investing funds' experts. Tenths of a percentage point may seem like small fry to the individual, but taken across a huge fund – Jupiter for example – it can make a huge difference in return.

In developing an investment portfolio, people investing have taken the decision to put monetary return above non-financial worth.  As such, serious investors must separate themselves from emotional attachment to any particular stocks, funds. or bonds. 

When investing in funds, keep in mind that money has no memory or feelings. You are not buying a bottle of fine wine to drink or show off, merely to temporarily own before selling at a profit.  Emotional detachment is the key phrase for anybody investing.

Learn more about investments

 
 
 
 
 
 
 
banner

 
 
© MyMoneyHelp.co.uk. All Rights Reserved.    Sitemap | Newsletter | About | Contact | Terms of Use | Privacy | Online Coupon Codes

Valid XHTML 1.0 Transitional

img