Thinking of Investing? Why You Need an Investment Management Adviser

You only have to look at the stock market and investment world for less than five minutes to understand that it is a fluctuating beast, an area which requires skill and know-how, in order to master not only the basics, but in order to grab success overall.

Jumping into investments with little or no knowledge is a recipe for disaster, it’s really that simple.

The fact of the matter is that interest rates are lower than they have ever been before, and whilst we’ve always been told we should save money in a high interest savings account, at the moment, that isn’t the most sensible option.

In the past, you would have got a low of 3% on your savings balance, but we can wave goodbye to those glory days! Instead, more and more people are choosing to invest their money, rather than save it, and then reap larger rewards further down the line.

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Where to start when looking for investment options?

The key is to find the best options to invest in, which will give you good returns (although varying) every year, without going too far into the big risk category.

Risk needs to be calculated in terms of gain, and if you’re a newbie to the investment world, you simply can’t be expected to know this, not without gaining advice first.

There is no investment out there which is without any amount of risk at all, but there are lower risk investments available too.

Of course, the returns on lower risk investments are smaller than the potential rewards on higher risk investments - but what if the high risk investment goes south?

Can you see how tricky investments can be if you’re not sure what you’re doing? For this very reason alone, hiring an independent financial adviser that specialises in investments will help you find the right routes to pursue, and to avoid the ones which are going to bring you nothing but wasted time and lost money.

Nobody has cash to burn these days, but trying to make more money from a smaller amount should be what we’re all aiming for.

It’s about making good decisions and knowing when to cut your losses. Again, an independent investment management adviser in Edinburgh is the one to tell you all of that, and more.

Where investments are concerned, the risk side of things does put a lot of people off, so let’s be realistic about this for a second. Let’s explore the pros and cons of investments, to help you make a decision on whether this is the right route for you to go down.

When you decide that investments are for you, if that is indeed the case, you then need to make an appointment with an independent financial adviser to find out your first tentative steps into the investment world.

The Pros of Investments

Many people choose to use investments in order to work as a passive income method, i.e. making extra cash at the side of their usual job, without putting much, or any, effort in.

Of course, you need to make the right decision from the get-go, and monitor it regularly, but investing in the lower risk end of the stock market is certainly something that many people dabble in, in order to line their bank accounts a little.

This can also be a good investment for the future, e.g. for retirement, to work alongside a regular pension scheme.

Getting the right amount of risk versus what you’re willing to (and can afford to) invest is the number one point, and sitting down with an independent financial adviser will be able to identify all of that information much quicker than if you tried to work it all out yourself.

The chances of error in that case are high - you’re not a born investor, after all. We all need to learn.

Let’s outline the pros of investing:

A comfortable and regular income of money, variable in amount according to the investment you choose
Income can be at various times, e.g. yearly or bi-yearly, depending upon the type of investment and the circumstances surrounding it. For this reason, shopping around for what suits you best is vital
There are many low risk investment opportunities out there, so you don’t necessarily have to go high risk and potentially lose everything if a major drop occurs. This can be a good first step into the investment world for many
Investments require little to no work at all, once the initial decision has been made, making them a great passive income method, or even a cash-making hobby!
Following your investment online is easy, once you get the hang of it, and this allows you to better understand whether your investment is thriving or diving
You can bail out at any time, however it is always better to get impartial advice before you make a decision to leave an investment and take your cash
A good investment can bring you big rewards in the future
Investments can be used for future financial comfort, e.g. retirement
Investments can also be used after retirement, to bring a further source of income into the household. During retirement, you can concentrate on lower risk investments, and you will also have more time to learn the nuances of the stock market in more detail, if you want to
You don’t necessarily need a large amount of cash to invest in the first place, but obviously, the more you invest, the greater your potential returns. It’s about being sensible with your investment capital, and seeking guidance from your personal investment adviser

From that, you can see why so many people invest, or are interested in doing so. Now, to balance things up, and to give you a complete overview, let’s talk about the cons of investing.

The Cons of Investments

Investments all come with a certain amount of risk, and as we mentioned earlier, that risk increases the more money you invest, and with what are deemed to be generally ‘riskier’ investments.

Searching around and doing research is vital, but even then you can’t be sure to know all the ins and outs of the situation you’re considering investing in.

Again, this is where an independent financial adviser will be able to help you out.

They will be able to go over the details and give you their professional opinion into whether this is a good idea or not.

It’s up to you whether you take that advice or not, of course, but it’s always wise to do so. An adviser doesn’t undergo years of training for nothing, after all.

The main cons of investments are:

You cannot cut out risk entirely, and it will always be there in some amount. Some people can cope with this easily, others find it too anxiety-inducing and choose not to try investing
If you only invest a small amount of cash, you may find that the return you receive is very small
It is very easy to invest in the wrong thing, if you’re not sure what you’re doing, and if you don’t seek out advice beforehand
Making the decision to stick with an investment or bail on it, can be a difficult one to make, and this is where seeking financial advice will help you gain confidence in your growing investment skills
Watching investments isn’t particularly difficult, but you do need to understand the investment market overall to be able to make good decisions - it takes time to build up understanding, and you shouldn’t attempt to run before you can walk.
The economy worldwide is very volatile at the moment, and even the slightest event seems to upset the stock market and all its related areas. Nobody can foresee certain events, so you have to go into investing with a ‘what will be, will be’ attitude to a certain degree at least, heeding advice as you go
Finding the right investment takes time and know how - you can’t be expected to be an expert overnight

Savings Versus Investments

We mentioned earlier that interest rates are so low in the current age that saving doesn’t really give you the same rewards that it once did.

Of course, savings accounts are still the right option for some people, e.g. those who simply can’t deal with the varying amount of risk associated with investing, but overall, investments do give a better return on cash.

An independent financial adviser will be able to show you the way forward with regards to low risk versus high risk investments, and could even find you a mid-risk investment opportunity, which is neither too little in reward, or too risky for your heart to take!

Investments make your money work harder for you, and the hope is that the reward will therefore be greater when the payout is made.

From there, you can choose to either re-invest your money and hopefully make even more, or you can take the cash and run, using it for whatever you need or want to use it for.

If you want to, you can do both, reinvesting a smaller amount, and giving you a small sum to tide you over. Investment is a flexible beast, whilst also being a complicated one!

Savings aren’t going to make you money, at least not much, but an investment will, provided you make a shrewd choice, based on good advice.

That’s what it really boils down to, but making the right choice at the beginning is the make or break area.

Independent financial advisers know the financial market extremely well, and they have the knowledge that you simply don’t have. It’s their job to know these things, so why not take advantage of that?

Of course, it’s always a good idea to keep some cash to one side in a savings account, because if you need to access money quickly, in one of those ‘unforeseen circumstance’ situation that life tends to throw at us on occasion, you can get to it much faster than if you needed to bail on an investment.

If you do this early, you risk losing a lot of cash, so having some savings, is always a good choice.

It really comes down to how much you save, and how much you invest.

Again, a financial adviser will be able to help you come to a good source of middle ground here, as well as helping you choose the right investment to put your cash into.

Looking at your overall financial picture will allow you to make affordable choices, whilst giving you a greater chance of returns at some point in the relatively near future.

What Can You do to Increase Your Investment Returns?

We’ve talked about savings versus investments and we’ve talked about the pros and cons, so by this point you should have a general inkling of whether investments are for you or not.

If you’re still not sure, again, an independent financial adviser will be able to answer any question you have on investments.

It’s not out of the ordinary to have several questions about this particular complicated financial matter, and that is what the professionals are there for!

It’s a good idea to have several ideas in your head when you meet your adviser, so that you can hash out the good from the bad at that point.

Minimising risk is really about making the right investment choice, as we’ve said countless times already, but there are a few things you can do, with the help of your adviser, which will help to minimise risk a little, and also increase the returns you gain on your investment choice.

What Sort of Risk Can You Afford?

In order to identify the right investment, you need to identify the amount of risk that you can really afford to take on - realistically. An independent financial adviser will be able to take a look at your overall financial status and forecast and give you an idea of what you can realistically afford to invest, without going over the top.

You need to make a joint decision on whether you’re looking to invest in the short term, e.g. less than five years, or whether you’re going for a more long-term investment choice.

Regular Investment Reviews

Your independent investment adviser can help you review your investments in more detail, and this should be done ideally on an annual basis.

This ensures that you have the right balance of money invested in your particular choice, you can explore how it is performing, what it is likely to bring to you rewards-wise, and you can make a shrewd and informed decision on whether you should continue with the investment or not.

If you don’t continue, you can then explore options regarding other investment opportunities, taking on board the information your adviser gives to you for your individual circumstances.

Make Decisions Based on Retirement

As retirement looms, this is another opportunity to look at your overall investment portfolio, with the help of your independent investment adviser, and look towards how much risk you have invested in.

As you move towards the end of your working days, it’s always best to minimise the amount of risk you are investing within, and stick to lower risk investments.

Remember, when you retire, you don’t have the monthly pay check from work coming in, so you don’t need to be adding extra risk to the mix!

Any investment which is regularly affected by ups and down (fluctuations) in the market, should be reinvested somewhere with less of a risk factor.

You can also decide whether to cash in on your investments at this point.

Stick to Your Investment Goal

Why did you decide to invest in the first place? Was it because you wanted to earn extra cash for your retirement? You wanted to earn money to pass onto your children for the future?

It’s very easy to lose sight of why you are investing your money, especially as rewards start to roll in, but it’s vital that you stick to your initial goal.

If you don’t do this, you run the very high risk of getting a little too far ahead of yourself, which then increases risk by a huge amount.

Your independent financial adviser will help you to stay on track with regular investment reviews.

Never Invest in Just One Thing

A good independent financial adviser will always tell you that investing in just one thing gives you a higher risk than spreading your investments across lower risk choices.

If you pile everything into one area, and then it goes bang, what do you do? You lose everything, that’s what.

If you spread your investments, and stick to smaller amounts, in low risk areas, then you will always have something coming your way, and that makes more money sense than having nothing at all!

Again, your independent financial adviser will show you what makes good sense and what doesn’t.

Don’t Have Your Head Turned by ‘Sure Bets’

There is no such thing as a ‘sure bet’, not in any investment across the entire planet!

Every single investment has a risk attached to it, it’s just about identifying how much risk.

The number one error that new investors make is listening to the blurb of a salesman who is promising them the Earth.

For this reason, always get your investment ideas checked out by an independent investment adviser, because they will be able to tell you the truth, without having any other prior motive.

A salesman has a prior motive, he or she wants you to invest your hard-earned cash in their initiative, and some unscrupulous types will tell you exactly what you want to hear in order to make you do that.

An independent financial adviser will take one look at it and tell you what it really boils down to. Make your decision based on that advice instead.

Know When It’s Time to Let go

No investment is going to work for you forever, and there will come a time when you need to cut ties, take your cash and move on to something else, or simply take the cash and run in general.

Knowing when to let go is a difficult decision for many, especially for first time investors.

There is always the ‘what if’ attached, e.g. what if it picks up, what if they have a major boom and I cashed in, what if I lose out in the end? The thing is, you can’t make your choice based on ‘what ifs’, you can only make it on the information you have available to you at the time, and the situation you are in financially too.

A financial adviser will be able to sit down with you and examine your individual investments, decide if they are doing well enough to stick with or not, and then you can decide together on whether it is the time to go, or the time to stay a little longer.

Sometimes, we all need a little nudge when it’s time to let go, and your adviser is the right person to go to for that nudge.

How Your Independent Financial Adviser Can Help You

We’ve talked a lot about risk versus benefit, and we’ve mentioned the main ways a financial adviser can help you in the sometimes confusing world of investments, but the number one thing to take away from all of this is that you cannot know it all, and a financial adviser knows a lot more than you do! It’s easy to think you can teach yourself, but as with anything financial, investments have layers.

One thing affects another, and when it comes to your cash flow, you need to ensure that you’re protecting every single penny as best you can.

An independent financial adviser is the one person on your side when it comes to investments, and the one person who will tell you straight. The advice you gain will be the basis on which to make your final decisions, and from there, you can look forward to prospective high gains in the future.

If you’re thinking of investing cash and you’re in the Edinburgh or general Scotland area, give us a call today. We’re happy to discuss any investment ideas you have, and help you come to a firm decision, before making the final leap.

From there we can do regular reviews with you every year or less, depending upon your preference, and make your investments work as hard for you as they possibly can.

It’s simply not worth making half-thought out decisions when it comes to investments, double checking everything with one of our highly professional and expert advisers will give you the peace of mind to have confidence in your investments, lining your bank account for whatever you choose to do with it in the future.

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