10 Investment Tips

Safety net
Look to have a safety net behind you.
Ideally aim for three to six months salary in cash before you make any other investments. This provides an emergency fund should you be made redundant or the roof blows off the house.

Stress test products
Before committing yourself to any financial product, including a mortgage, stress test it. In other words don't merely look at the best scenario, look at the worst. So if you are taking out a large mortgage, look at what you might have to pay back if rates were 3% or 4% higher. Don't believe anyone who says it might never happen. The fact is it usually does!

Set a budget
Set yourself a budget. Know how much money you have coming in but, more importantly, check how much money is going out.
One way to do this is to note down over a period of four or five weeks every bit of your expenditure.This can identify spending that is going out of control, and is a useful way of identifying where you can make savings.
For example, not buying a coffee at Starbucks every week will save you £500 a year.

Risk and your age
Don't be afraid when you are younger to take on more investment risk.
For instance, if you are thirty years away from retirement the need for diversification is generally unnecessary.Diversification is far more important when you have accumulated money not when you first start.

Learn about investing
Learn something new every day about investing - just one thing - but don't think you have to learn about everything at the same time.
Pick one investment subject or aspect about investing and make it your own, become a specialist.

Stick to familiar names
Don't invest in companies you have never heard of. Learn as much as you can about them: How long have they been going? What levels of profit are they making? What do they intend to do going forward? Who runs the company? And if there is something you want to know about it, ring up and ask.

Be realistic
Be realistic in your expectations - generating a return greater than the 4.75% you might get at the bank is your aim. If you want to get rich quick, do the lottery - the stock market is generally for people with patience. Many an investor went bust chasing the pot of gold at the end of the rainbow. There are plenty of shares to choose from which offer growth or yield potential, or both.

Run with winners
Run with your winners and cut your losers - psychologically, investors hate taking a loss, but as the old saying goes, 'the first cut is the deepest'.



Go for gold
Do, though, look for opportunities to take profits. No investor ever went bust taking a profit.