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how long to invest

The value of investments can fall as well as rise. You may get back less than you invested.

Ok – A VERY general rule on this would be “as long as you’re able to”. Typically, the longer you invest – the more profitable your investments will become… having said that, there’s no guarantee.

For the majority of people, the choice of how long they invest is determined by the goals they’re trying to achieve. For example, if you’re 50 now and you’re looking to buy a place on the Riviera when you retire – you’ve probably got 10-15 years and that’s important. Understanding and setting goals before investing will help you and your financial adviser to better understand which investments are right for you.

Typically investment strategies / goals are split into three tiers:

• Short-term goals are things you plan to do within the next five years
• Medium-term goals are things you plan to do within the next 5-10 years
• Longer-term goals are ones where you’re won’t need the money for ten years or more

If you want to invest in the short-term (less than 5 years), you’ll need to be comfortable taking on board a higher level of risk as the stock market is just as likely to go up as it is to go down in that amount of time. That means you could get out less than you invested in the first place, so depending on your goals and attitude to risk, putting your money into an ISA might be a better option but always talk it through with a financial adviser first.

If you can commit your money for at least five years – you’re in to “medium-term territory” and this opens up a variety of investment options. Your investments that make up your ‘portfolio’ could contain a mix of funds, investing in shares, bonds and other assets which are carefully selected and monitored by professional fund managers.

Ramp up to 10 years + and the investment world is your oyster. Let’s say you start investing when you’re in your 30’s and have no plan to take out the funds before retirement. That will easily give you upwards of 20 years before you start drawing money from your investments. With time on your side, you might consider riskier funds at the beginning, that have the chance of delivering bigger returns in the long term.

As you get closer to retirement, you can change strategy and sell off some of these riskier investments and move the funds to safer options with the aim of protecting your investments and their returns. How much time you’ve got to work with, your goals and your attitude to risk will all have a big impact on the decisions you make.

The very best place to start is by speaking to a Financial Adviser so pick up the phone and contact a member of the Credius team today on 020 7562 5858 or email us at info@credius.com. We’d love to hear from you.

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