Whether you are investing for your retirement or just trying to make the most of the capital you have available, no-one wants to make bad investments. Unfortunately, 2018 is shaping up to be a challenging financial year with a number of potential slip-ups that could derail even the most sensible investments. So what can you do to help give yourself the best chance to make more from your money?
We spoke with experienced financial advisors Reeves Financial to get a better understanding of making investments for your future. Here are some advice and tips you can follow to stay smart with your money and avoid bad investments through 2018.
A volatile investment market
There can be no doubt that the current market for investment is quite volatile. There are a number of complicating factors such as Brexit and a flailing government that is providing virtually no economic confidence. Markets typically hate uncertainty, and there is so much of it in the air the trying to make a smart investment can be hard.
So when you come to make your decisions, try to look beyond what’s happening right now and see where markets will go in the event of scenarios coming true. When Brexit occurs, there will be winners and losers, and it is important to factor this into your decisions.
Safe as houses?
For a long time there has been a simplicity to investment for those who don’t have the time to learn about stock, shares or other investment opportunities: put your money in property. Having somewhere to live is a basic human need which makes property by far one of the safest investments in the long term.
But through 2017 and into 2018, the housing market has not looked nearly as attractive as it has in the past. High value property areas in London and the South East have seen many years of high growth but there are forecasts of this slowing down over the next few years. This means that if you are looking to put money into property it can be necessary to look to growing areas such as the Midlands and the North.
If it sounds too good to be true…
In 2018, just as in any other year, there will be plenty of investment opportunities that look extremely tempting. The offer of very high returns can seem like a no-brainer but there is an old saying that goes if it sounds too good to be true, it probably is. The sad truth is that many investments look good on the surface but if you attempt to put your money there without sufficient understanding of the market, you can be the one that loses out.
Take the example of Bitcoin. The value of the cryptocurrency has seen incredible levels of growth to the point where 1 Bitcoin was worth almost $20,000. Given that in 2013, a Bitcoin could be bought for $100, and the price was lower than $1,000 per coin as recently as early 2017, it reveals just how much investors can make by getting in at the right time.
But this only tells a part of the story. Bitcoin is extremely volatile – at the time of writing the value has dipped below $10,000, effectively halving its value in less than a month. The problem with investments that offer such high rewards is that they come with an extremely high level of risk. In the long term, this is not a smart way to invest.
Work with a skilled and experienced financial advisor
Of course you need to do your own thorough research before you feel comfortable committing to an investment and many put in hours reading up on the potential pitfalls and benefits of ideas that they are interested in. But if you are looking at investing in something on the side, it can be almost impossible to have a balanced view on whether it is a smart move or not.
It is still the case that if you want to have the best possible chance at making good financial investment it is smart to speak to a financial advisor. A financial advisor spends their whole working life discussing, reading about and hearing the stories of investors and people in the same situation as you.
Remember that every kind of investment product will be happy to take your money, but not all of them are appropriate for you and your situation. Your financial advisor will be able to guide you through the range of options available.