Free delivery on office supplies everything from stationery to office furniture

Click here for a free consultation - make foreign exchange work for you

Free ink cartridge click here new customers can order an ink cartridge for £0

Document sharing - share, edit and save documents Secure document collaboration made easy!


Equity Investments Guide

Spread your risk

This means owning not just five or 10 different shares but 30 or 40, sometimes many times that. In effect, of the price of one share falls the others should keep the overall portfolio in a healthier state.

This means, by the way, that you should be looking to buy shares not just in different companies or even sectors, like financial or raw materials, but sometimes right across continents. Indeed, there is a powerful school of thought that says shares in different sectors behave differently: some rise and others fall at various times. By holding some of each you minimize overall volatility.

Trust the experts.

Selecting all those shares, monitoring their performance, selling those that are not doing well and buying new ones, all the while researching the market for fresh investment opportunities, is an onerous task. Which is why if you are unsure of what you are doing, it helps to go to a fund manager who will do all that work for you. A manager will usually be investing in anything between 20 and 60-70 shares in his fund. If you are unsure which manager, or even managers, to choose, talk to an independent financial adviser.

Don’t try to 'time' the market

Many investors assume that they need to be in and out of the market, buying and selling feverishly every day. In fact, research has found that over long period of time, it does not matter too much what day, month or even year someone went into the market. After 20 or more years, gains and losses average themselves out.

Drip-feed the market

Clearly, many investors are still likely to be concerned at the possibility that if they stick all their money into shares in one fell swoop, their price may fall the next day – and that has been known to happen. One way round this is to invest smaller lump sums every month.

This is often called “pound cost averaging” and it means that if markets fall, each month you will be buying a progressively larger number of shares with your money. This means that the “average” cost of all the shares you have bought is lower than if you had invested all your money at once. And, assuming the price recovers, your gains will be higher than if you had bought them all at once.

The last word

Finally, and this cannot be repeated too often: if you are unsure of how to invest in shares, do talk to an expert, specifically a financial adviser who is regulated by the Financial Services Authority – the City watchdog – and has all the qualifications necessary to help you make good choices.


More pages

Page 1: Introduction
Page 2: Spread your risk

Click here for a free consultation - make foreign exchange work for you

Get Your Website On The First Page Of Google On A Budget FREE website health check and white paper on SEO in a recession

Free ink cartridge click here new customers can order an ink cartridge for £0

Document sharing - share, edit and save documents Secure document collaboration made easy!

Free delivery on office supplies everything from stationery to office furniture


Browse our articles written by leading industry experts:

Overseas Property Buying Guides

UK Property Guides

Gardens and Interiors

Cosmetic Surgery Fact Sheets

Looking Good Guides

Money

Business

Community

Travel