Savings and investments - an introduction - by independent financial adviser John Bramwell

Introduction to
Savings and Investments

How do you choose the best place for your money?

There are a multitude of companies and institutions in which to invest your money, from simple bank or Post Office savings accounts to venture capital trusts.

The selection depends on many factors, including: how much you have to invest (lump sum or regular savings), when you need the money, what you are saving up for and, importantly, your attitude to risk.

Whatever your attitude, it is important to make sure that your investments are diversified to reduce the risk, ie. don't put all your eggs in one basket. This is often achieved by using collective funds, such as unit trusts, OEICs, investment trusts or investment bonds, which hold wide ranges of investments within individual funds.

Direct holding of shares is a common way to invest money but carries a higher risk, which is why we usually recommend collective funds.

All types of savings and investments have tax implications, so it is also important to make the most of tax-free schemes to avoid paying tax wherever possible.

Investment product providers should be assessed for their performance, charges, and terms and conditions.

Past performance of an investment cannot be used to predict future performance, but it is often used to help with selection and to identify good fund management.

WARNING - Past performance is no guarantee of future performance and the value of investments, and the income derived from them, can fall as well as rise.