Today we will be looking at the first 3 of our 10 Principles that every investor should know when starting out on the investment path.

1) SET INVESTMENT GOALS

i. Setting investment goals will help you stay focused and on track to achieving your financial objectives; with a well-structured plan in place, you can confidently stay committed to it.
ii. When determining your goals, you should consider your age, investment time frame, and risk tolerance.

2) PLAN ON LIVING A LONG TIME, AND SAVING MORE FOR IT

i. People aged 65 in the UK in 2020 can expect to live an additional 19.7 years for males and 22.0 years for females, with this figure expected to rise to 21.9 years for males and 24.1 years for females aged 65 in 2045[1].
ii. Investors should start early, invest with discipline, and have a long-term plan.

3) CASH IS RARELY KING, AND INFLATION EATS AWAY AT YOUR PURCHASING POWER

i. Cash is a popular asset class, but keep in mind that it is not always king – inflation can erode your cash’s purchasing power, making it a less appealing option in the long run.
ii. When inflation is factored in, cash typically lags behind other asset classes such as stocks and bonds, which can mean that cash will lose purchasing power over time.

Visit us again tomorrow for the next 3 investing principles or download our Guide to Investing. You can also Contact Us to see how we can help you get started in your Investing Journey.

Source data:
[1] The Office for National Statistics (ONS) – Past and projected period and cohort life tables:
2020-based, UK, 1981 to 2070