NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

4 quick tips to help you invest smart

4 quick tips to help you invest smart
Image source: Getty Images

Everybody wants to invest smart, but not everybody wants to put the effort into learning how.

Plot your path towards financial freedom with our Hero’s Journey tool!

MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.

This tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.

According to Forbes, 62 per cent of Brits are choosing not to invest at all, citing a lack of money or poor understanding of the market as their reason. 

If you are ready to make the jump into investing but don’t know where to start, here are 4 tips to get you going.

1. Learn the basics

If you don’t know anything about investing, the smartest thing you can do is spend some time learning. At a minimum, learn the basic investment terminology so you can make informed decisions.

Part of learning about how to invest smart is also understanding what type of investor you are. Some people prefer to use investing apps and manage on their own. Others would rather have a professional handle their investments for them.

2. Set investment goals

Before you put any money into the market, figure out what you want to get out of it. Your age, your current financial situation and how much capital you have available are all important factors. You also need to figure out if you can handle the risk, both emotionally and financially.

Are you investing with a goal in mind? For example, are you investing so you can retire in 15 years? This would require a different investment strategy than if you’re in your 20s and just starting to grow your net worth.

4 iron-clad rules for saving money on everything

Our Editor Sam Robson has been on a personal cost-cutting mission for years – and it’s time to share his wisdom.

Check out his choicest saving tips and tricks in this free report, “Sam’s 4 Iron-Clad Rules For Saving Money On Everything”.

Just enter your email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.

Keep time frames in mind as well. If you can stay in the market for the long haul (10 years or more), your choices may be different than if you want to see faster results.

3. Do your homework

Investments should not be made in an emotional way, which can lead to rushed decisions and mistakes. To invest smart and steer clear of trouble, make sure you research properly before you put your money anywhere. As with everything in life, if something sounds too good to be true, it probably is. Keep your eyes open for red flags such as brokers who promise a guaranteed return on investment. There’s no such thing when investing. 

While you should research how stocks have done in the past to understand the market better, good past performance does not mean that the stock will keep doing well.

A better approach is to sit down and figure out an investment budget, if you haven’t yet. Always avoid borrowing to invest. If you are in debt or don’t have an emergency fund in place, you might not be ready to invest just yet.

4. Diversify your investments

The golden rule of investing is to never put all your eggs in one basket. A diversified portfolio is safer from market ups and downs, recessions and crashes. This means investing in different industries and companies, but also using different investment strategies. For example, you can put some money in stocks, index funds and bonds that you plan on holding for years (long-term investments). Then also invest in stocks that you can buy/sell as the market changes.

It also makes sense to consider investing in real estate if you can afford it. Depending on your finances, this could mean buying a small fixer-upper that you can then resell for a profit or getting an apartment in a holiday destination that you can then rent for profit. The alternatives are never-ending, depending on what you’re looking for and how much money you have available. In the long term, however, real estate is rarely a bad investment.

Reviewed and rated 4 stars out of 5 by MyWalletHero

Need a financial adviser? Get a free initial review lasting up to 1 hour, plus £50 off any follow-up advice.

MyWalletHero has sourced you a £50 discount off the cost of advice when you find an independent or whole-of-market financial adviser through*. All advisers are FCA-regulated, qualified and give fully unbiased advice. To find yourself an adviser fast and for free – use the Unbiased matching tool.

*This is an offer from one of our affiliate partners. For more information on why and how we work with partners, click here.

Was this article helpful?

Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.