What is investing?

An investment is putting aside money today to use in the future. Unlike with a savings account, there aren't any guarantees. But an investment could give your money more potential to increase in value over time. 

How it works?

There are several ways to invest in the markets. You could buy individual shares, for example Apple Shares, or HSBC Bank shares.

If you're happy spending time doing your own research, individual shares could be a good option for you. When you buy a share, you're buying a stake in a company. Most people may invest in companies they know and understand, and although this may be make things easier to understand you may be increasing your risk to a particular sector, for example, supermarkets or banks. Investing in shares usually carries a high risk.

Another option is investing in funds. If you do not wish to make your own investment choices buying individual shares, you can leave it up to the experts, by investing in vast selection of funds in the market. With funds, you buy units or shares in a ready-made basket of investments, that will then be managed for you. A single investment in a fund is split across various stocks, sectors, regions and assets – which spreads your risk.

Funds are also known as portfolios, they tend to contain a mix of global investments that fund managers will look after for you. This means that your investment will be spread across multiple stocks and shares, so you don't have to choose them yourself and your risk will be spread. 

You can keep your fund in a tax-efficient stocks & shares ISA or a general investment account (GIA), investment bond or pension.

You should aim to invest for at least 5 years. But your money isn't locked away – you can sell your investments at anytime. However, it would be recommended to check with your financial adviser before encashing investments, so they can explain any tax consequences and any other implications.

Tax-efficient wrappers

A stocks & shares ISA (Individual Savings Account) is an account that you can use for your investments.

It's a tax-efficient way to potentially grow your investments, because you can invest up to £20,000 in the current tax year, without paying any UK income tax or capital gains tax on any income or growth.

You can have different ISAs at the same time with multiple providers, but you must stay within the total annual limit of £20,000 across all ISAs. Other tax efficient ISA’s which a lot of people are unaware of are the Lifetime ISA and Junior ISA, both with their own tax benefits.

Remember, investing has its downs as well as ups – so you could get back less than you invest. Plus, tax rules can change and any benefits will depend on your individual circumstances.

How Smart Independent Financial Advice can help

During your initial discovery meeting, we will find out what your current and future goals are and establish how realistic they are in terms of your current situation.

We will start to think about how your money can be invested in a way that matches your goals, attitude to risk, capacity for loss and any ethical investment preferences. What’s more, we’ll help you avoid making any bad decisions that could turn out to be expensive, such as impulsive reactions to short-term fluctuations in the stock markets. If necessary, we’ll then consider the best ways for you to make the most of the tax allowances and reliefs available to you; such as ISA’s, pensions and bonds. What’s more, by meeting on a regular basis, we’ll be able to review your plans and any changes in your circumstances. That way, we can make sure everything is on track to meet your goals while making adjustments to your portfolio if necessary. Perhaps even more valuable, is the kind of peace of mind knowing you’re on the right path.

For your added peace of mind, Smart Independent Financial Advice Ltd do not charge any upfront advice fees. You will only pay an advice fee when you are 100% satisfied and our recommendation is implemented.

Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets beyond our control. Investments and the income from them may go down as well as up and you may get back less than the amount invested. Past performance cannot be used as a reliable prediction of future performance.