What shares will give me the best investments to save for my future?

Asked by Steve

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Answered by D C, IFA in Bristol, DEVON
Well...shares may not be the best investments for you, and nobody without accurate, careful understanding of your timescale, income, prospects, age and state of health can really give you an answer. Here are a few points, though.

Individual shares are very risky. A share is the ownership of a small part of one company, and if the company does very well, then so will you. But if the company goes bust you will lose it all. Stockbrokers are the best people to advise on individual shares, but they will expect you to have a substantial amount to invest - perhaps £100,000 or more.

'Funds' are generally also invested largely in shares, but in this case you are participating in the average performance of a large number of companies - maybe 100 or more. Different kinds of funds bear different risks, with 'riskier' funds tending to be more suitable for younger people and those with a resilient attitude, who will still sleep soundly if the value of their funds drops.

Other, lower risk investments include corporate bond funds and deposit accounts. These tend to be suited to people who want to reduce their risk, or need income, or perhaps (to make a generalisation) are rather older. If you are saving to buy a house within say the next year or two, there really is no sensible alternative to a straightforward savings or deposit account.

Then again, other investments such as rental property and so on can form part of a longer term investment strategy. It is more important than ever before to develop and maintain a robust, long-term savings strategy. It is really worthwhile to use the guidance of an independent financial adviser. | 12.15.10 @ 23:12
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$commenter.renderDisplayableName() — {comment} | 11.20.17 @ 17:09
Answered by John Stirling, IFA in Saffron Walden, ESSEX
That question is a bit like asking 'which horse will give me the biggest win at the races on Saturday' or 'which numbers should I choose for the lottery this weekend'?

The answer is obviously 'the one(s) that win' - or in the case of shares 'the ones which grow the most'.

Unfortunately since as far as I am aware anyone who claims to know the future is at the very least an optimist then we need to rely on hard work, research, and probability, and have no certainty of the outcome.

In which case I would refer you to Dr Carter's answer above.

I would perhaps add that if it's a hobby then there is nothing wrong with having a few hundred, or thousand pounds in an 'execution only' share trading account, and based on your own research buying and selling a few shares, but unless you are really very good don't expect to 'win' over the long term. Human psychology tends to try and force us to buy the worst possible shares, and sell at the worst possible time. | 12.16.10 @ 09:22
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$commenter.renderDisplayableName() — {comment} | 11.20.17 @ 17:09
B
Answered by benhfuller
Both John and David are completely right, it is very difficult to answer what shares would be 'best' without knowing more about risk appetite. Unless you're confident in your ability to 'pick winners' (caution needed) choosing a very diversified fund(s) is the usual method of spreading risk. | 12.17.10 @ 13:28
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$commenter.renderDisplayableName() — {comment} | 11.20.17 @ 17:09
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Answered by

D C
D C, IFA in Bristol, DEVON

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