The benefits of regular savings

Working out where to invest your money in a world of uncertainty can be a risky business.  But there is a way to help ride out the ups and downs of the markets – and that’s by saving regularly.

Unfortunately, none of us have a crystal ball.  If we did, we would all be very rich (and I would be out of a job!).  We would all know which start-ups are going to become household names, which markets are going to crash and which economies are going to emerge as the tigers of the future.  In other words, we would know exactly where to put our investments to safeguard our futures:  we would know what to invest in and, crucially, when to pull our money out of the market. 

But without the ability to see into the future – or the benefit of hindsight – there is a way to try and protect against the ups and downs of the market, and that is to invest regularly.  The technical term is 'pound-cost averaging'.

The benefits of investing small amounts regularly

• Reduced risk: Putting smaller amounts of money into a fund or other investment regularly reduces the overall risk of investing at the wrong time. Compared with investing one large sum in a single transaction, the risk is mitigated by the fact that, over a period of time, your smaller, regular sums will be invested at a variety of prices.
• Affordable: Regular saving is a great way to build up a lump sum from almost nothing. Setting aside a lump sum of £5,000 is a tall order for plenty of people. However, putting aside £100 a month from your income might be less of an issue – and the addition of investment growth or interest means that you could quickly build up a reasonable amount without necessarily noticing. And the longer you can leave that growing amount alone, the more impressive it potentially becomes.
• Different options: Most investment products offer regular savings as an option, including investment funds, Individual Savings Accounts (ISAs), life assurance and pension plans. 

FOR EXPERT ADVICE ON SAVING FOR YOUR FUTURE, 

call Graham on 07740 192505 

or email gkinns@coreifa.co.uk 

to book a no-obligation consultation at our expense