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  • Investment masterclass - how to make your first investment

    Ready to start your investing journey? Here are some tips on making your first investment.

    Last Updated: 1 January 2003

    So, you think you’re ready to invest? Well, choosing your investments are one of three important steps to think about when becoming an investor.

    Once you’ve decided on an investment platform and you’ve picked an account, you might want to think about where to invest your money. There’s a lot of choice out there, so let us break it down for you.

    Investments fall as well as rise in value, so you could get back less than you put in. This article isn’t personal advice. If you’re not sure if an investment is right for you, you should ask for financial advice.

    What types of investments are there?

    Investments come in all shapes and sizes, but the two main things you can invest in are:

    • Shares: are the heart of investing and represent a percentage of an individual’s ownership of a company.
    • Bonds: are a loan to a company or government in exchange for a regular income payment until it’s repaid.

    Both can be bought individually and can offer you good returns. Just be aware that they are higher risk because your investment is relying on only one company.

    If you’re just starting out, then funds could be a better option. A fund pools together the money of lots of different investors, and a fund manager invests on their behalf. These investments can include various types of assets like shares and bonds, therefore offering more diversification. Diversification is key, as it stops you from putting all your eggs in one basket.

    Once you’ve decided what to invest in, the next step is to decide how much and how often.

    How much should you invest and how often?

    When investing you usually have two options – you can invest monthly or in a one-off payment.

    It’s impossible to know the best time to invest, so drip-feeding your money into your chosen investments could be a good option.

    Why? There are a few reasons:

    • Adding small amounts each month means you’re less exposed to sharp market falls, just remember you might not benefit from the highest highs either.
    • It allows you to invest throughout the market cycle. Meaning you buy at the average price of the market, rather than investing all your money when it’s the most expensive.
    • You will consistently be working towards your investment goals.

    Want to learn more?

    Every day is a school day in the world of investing. If you want to read a little more before deciding, here are a few bits you might find useful:

    Find out why diversification is key

    Discover what makes a good investor

    Learn how to create a great portfolio

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