Capital Ideas is a trading style of Financial Horizons Ltd. Financial Horizons Ltd is an appointed representative of Burns-Anderson Ltd, 27 Great George St, Bristol BS1 5QT, which is authorised and regulated by the Financial Services Authority. Burns-Anderson Ltd is entered on the FSA register (www.fsa.gov.uk/register) under reference 126191. The information and content of this website is intended for UK consumers only and is subject to the UK regulatory regime. The FSA do not regulate some forms of mortgages or tax planning services.
Financial Horizons Ltd Registered Office 70 Victoria Road, Darlington, Co Durham DL1 5JG. Registered in England no. 07714109.
Copyright 2010 © Capital Ideas
Site designed by gr8websites.co.uk
Whether you're a long-term investor or you’re investing short-term, the range of investments can be confusing. This guide aims to explain many of the investment schemes that are available. Remember, you do not need to invest just in one investment. It is usually a good idea to spread your lump sum.
The main choices available to you include:
- Repay your debts
- Bank accounts
- Building society accounts
- National Savings
- Pooled funds (including unit trusts, OEIC’s, investment trusts and life insurance funds)
- Shares
- Bonds
- Property
- Borrowing to invest
Just click on the links for further information. Alternatively, contact us for assistance.
Short term investments
If your money is likely to be needed in the short term, for instance within five years, the only investments that are likely to be suitable are bank and building society accounts and National Savings. These are relatively secure investments, and can be arranged so that your money is available at fairly short notice. Over a short timescale any other types of investment are likely to involve a significant risk that you may get back less than you invested when the time comes to withdraw.
For guidance on suitable investments, contact us.
Longer term investments
When considering longer-term investment, firstly make sure that you keep enough money safe for any expenditure that you know is coming up, and keep a further amount safely invested in case of unexpected emergencies.
For the rest of your savings, you may wish to consider taking an element of investment risk if you think that you can invest it for five years or longer. The longer the timescale, the more likely it is that you will get bigger returns by taking some risk.
You can reduce risk by taking a number of sensible precautions. Firstly, although investment in shares, for example, brings potential for higher returns, individual company shares can be very volatile, and it is easy to lose your entire investment. If shares (sometimes called equities) are right for you, spreading your investment across a number of companies removes some of the extreme risk.
To reduce risk further it may be advisable to spread your investment across different business sectors, invest some internationally, and spread your investment across a number of investment types. This spreading is called diversification.
Diversifying your invested assets in this way can help to increase your chances of investment success over the longer term. The correct allocation of assets is a process that takes skill and needs extensive research capabilities. We are well-placed to assist you with suitable asset allocation. For further help, just contact us.
Taxation
Many of the investments mentioned are available in different tax 'wrappers'. The underlying investment may be identical, but a ‘wrapper’ can significantly affect the amount that you get back from your investment.
Investments may be held ‘bare’ (on their own), within a life insurance bond, within a pension, or within a PEP or ISA. Each of these different 'wrappers' has different taxation implications.
For help in selecting suitable investments and making sure that the tax 'wrapper' is appropriate to you,
