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Frequently Asked Investment Questions

Below is a list of frequently asked questions. Many of the questions here (and many others you may have) can be answered by our Investment Philosophy Document. If you haven’t read it already (or haven’t for a while) we recommend you read it along with the questions below.

Why have my investments gone down in value?

It's worth noting that there is no frequently asked question “Why have my investments gone up in value?” This is just as important a question, but many people expect their investments to go up in value all the time so never ask! This isn’t the case; investments will go down as well as up, this is part of the risk that brings reward. Whilst they will fluctuate in value, we expect the overall long-term trend to be an increase in value that is greater than cash.

Investments will go down in value due to a variety of factors, such as market fluctuations, economic downturns, changes in interest rates, company performance, geopolitical events, and more. It's important to remember that investing always involves risk, and even the most well-researched and diversified portfolio can experience losses. Our investment philosophy is to buy the appropriate, good-value investments in the right amounts according to your risk. When markets go down (which they absolutely will!) stick to your plan and ride it out.

When is the best time to invest?

The best time to invest depends on your personal financial goals and circumstances. Generally, it's recommended to invest for the long-term and to start as early as possible. It's also important to have a diversified portfolio and to consider factors such as your risk tolerance and investment timeline.

What is the best thing to invest in?

There is no one "best" investment that is right for everyone, as it depends on individual goals, risk tolerance, and time horizon. Our research and that done by numerous academics including many Nobel Memorial Prize winning economists has led us to our investment approach. We will tailor our approach to your appetite for investment risk and capcity for loss.

What about cash now interest rates are higher?

Investing can be likened to having both a train and a bus as transportation options. The train represents your investments, and the bus your cash reserves.

Just as a train is well-suited for long journeys, investments are typically best suited for long-term financial goals. Much like a train, they may have occasional stops and starts, but over time, they can cover substantial distances and yield meaningful returns. Patience is key when riding the investment train, as you need to stay on board for the long haul to reach your destination.

On the other hand, the bus is your cash reserve. Buses are perfect for short trips, quick stops, and emergencies. Similarly, cash serves as a reliable vehicle for short-term expenses, unexpected bills, or opportunities that may arise suddenly. Having enough cash on hand is like having a bus ticket ready to get you where you need to go in the short term, providing financial flexibility and security.

So, when planning your financial journey, you must balance your "investment train" for long-term growth and your "cash bus" for short-term needs to ensure a smooth and successful ride toward your financial goals.

How much should I invest?

The amount you should invest depends on your personal financial situation, goals, and risk tolerance. We can look at all of these and work out what’s affordable and realistic. You should always consider investments as long term so we would only ever recommend investing money you can afford not to access in the short to medium term.

My investments have gone down in value, should I sell them and move to something that's been doing well?

It's important to avoid making emotional decisions and to consider factors such as the reason for the decline in value, your investment timeline, and your risk tolerance. We have to say that investments can go down as well as up. However, we prefer will go down as it’s an inevitable part of the investment cycle.

Also think about your home, if you own it. Would you sell that every time the property market sees a fall? With investments it’s much easier to see the changes in value, with bricks and mortar you only really know the value when you actually sell it.

The important thing is to remember your plan and stick to it. If you are selling when your investments are down someone is buying them in the belief that they’re good value.

What is your economic forecast for this year?

Making an economic forecast for the year is much like making a weather forecast for the year. Yes, there are patterns that we can expect to see; it’s warmer in summer than winter, on average, investments will go down as well as up. However, it's worth noting that economic forecasts are subject to change and are influenced by a variety of factors such as political events, market trends, and global economic conditions. We therefore don’t see a value in predicting the future but rather keeping to our investment philosophy.

My friend has doubled their money in XYZ PLC. I want to invest too. My friend has doubled their money in XYZ PLC. I want to invest too. Is this a good idea? Should I follow their other tips?

It's important to remember that past performance is not necessarily indicative of future results, and investing always carries risk. It's important to conduct thorough research on any potential investments, including analysing the company's financial statements, assessing the competitive landscape, and understanding market trends. Ask yourself, what did your friend know that the rest of the world didn’t, or did they get lucky? Have they also told you about the losses they’ve experienced? If you could double your money, is it possible you could also lose it all and is it worth the risk?

I can make investments myself, why should I use a financial planner?

While it's possible to make investments on your own, a financial planner can provide valuable expertise and guidance in areas such as investment selection, risk management, tax planning, retirement planning, affordability, and realistic expectations. They can also provide objective advice and help you stay on track towards your financial goals.

What about inflation?

Inflation results from rising prices in goods and services that we consume. This is something that we want to beat when it comes to investing and is a reason to move away from cash and into the markets. Over the long term we expect investing to beat cash and beat inflation. If it doesn't you end up with your money being worth less than it was, what you can buy for £100 today is not what you could have bought 20 years ago.