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4 tips to make investing less stressful

Social media can make investing seem stressful. But it doesn’t have to be. Here are 4 tips to make investing less stressful.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Go to any social media platform these days and it won’t be long before you start getting tailored investment content and adverts.

Peppered among the memes and takes on what a tech billionaire’s done now, you’ve got a bunch of people telling you the next big thing. And how to make money as a side hustle or in your free time.

Usually it involves looking at complex charts, baffling terminology and the expectation that you’ll always be glued to live price feeds to see if you’re doing well.

You might end up spending more time on it than you wanted to.

But investing doesn’t have to cost all your free time. It doesn’t need to be about chasing the next big thing, panicking about sharp dips or constantly monitoring your investments. In fact, for the most part it shouldn’t be.

You can invest and make the most of your money. But also get on with your life without having to check prices constantly or be kept up at night worrying about whether you’ve made the right call.

It’s all about the approach you take. Here are four tips to make investing less stressful.

This isn’t personal advice. Investments can fall as well as rise in value, so you could get back less than you invest. If you’re not sure what’s right for you, please ask for financial advice.

1. Think long term

Stock markets have actually done fairly well over the last year. Sharp drops at the start of the pandemic have been followed by surprising climbs. Despite economic shocks, some markets have even reached all-time highs.

The performance we’ve seen recently isn’t guaranteed to carry on though. No one really knows what’s going to happen next.

Investors need to be realistic about the returns they might get. You can’t expect every investment you pick to be a winner, or that you’ll double your money overnight. Yes, it could technically happen, but it’s unlikely – especially to do it more than once. At the same time you could also just as easily lose money.

Investing is to help reach your long-term goals like buying a house, building up a second income, or to help you live better in retirement. These things are harder to get right if you’re investing in a small number of exciting stocks bouncing up and down like a yo-yo.

You should be willing to hold an investment for at least five to ten years. The hope being that over that time the value will increase.

If you’re going to invest in something, consider whether you’d hold it for that period and why. If you’re not willing to, then you shouldn’t be investing.

Should I save or invest?

2. Think about how much risk you’re happy taking

Risk is personal. How much risk you’re willing to take is up to you.

The more risk you take, the greater potential there is for higher returns. But also for potential losses.

Picking a stock which might make large gains in the short term can make you giddy when something goes up, but induce anxiety if it drops. Volatility can be stressful.

Before you invest a chunk of your wealth in something risky, think about how big drops in price could make you feel. Can you afford any losses?

Remember different investments, and how you approach investing, can lower the overall risk you’re taking.

Find out more about risk

3. Diversify

It’s impossible to accurately predict what’s going to do well and what isn’t. So why not take bits of everything?

Not having all your eggs in one basket and spreading your money across a wide range of investments is the backbone to good investing.

It’s not just about holding lots of different investments though.

Make sure they come from different areas of the world, sectors and aren’t all just shares.

Investments, like shares, bonds and property perform differently in different market conditions. As do different regions and sectors. Having a mix could mean you always have something working well.

Take shares and bonds. Historically, shares have delivered the best long-term returns. But share prices usually swing up and down more than bonds, and shares are usually more sensitive if the economy starts to slow down. Bonds have tended to hold better in market jitters, giving investors a less volatile return when shares are slipping.

Find out more about diversification

4. Take advantage of funds

Funds can do a lot of the hard work for you.

You might immediately think of hedge funds, and that maybe they’re limited to a select few with millions to invest. But most people can invest in funds. With us you can invest from as little as £25 a month or £100 as a lump sum.

There are two main types of fund. Passive funds aim to track and match the performance of an index, like the FTSE 100 or S&P 500. They’re usually cheaper. Whereas active funds will try to beat the index – they normally charge slightly more.

Fund managers usually have years of experience and have invested during both good and bad times.

Investing in funds can really help diversify your portfolio. That’s because funds are made up of a number of different investments. Owning a few funds that invest differently can really boost your chances of long-term success.

Make sure you feel comfortable with the manager or approach they’re taking. Any investment you make should also match up with your long-term goals and objectives, and with how much risk you’re willing to take.

Overall, we think leaving more to the experts can make investing a lot less stressful.

Help choosing funds


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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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