When you invest, there are two important considersations. Firstly, you need to decide the product in which you wish to invest in. Secondly, how you want your monies to be invested.
The following types of products are available to you on the True Potential Platform:
- Stocks & Shares ISA
Invest up to £20,000 this tax year in a tax-efficient account. Withdraw anytime.
- Personal Pension
Typically get tax relief on up to £40,000 per year (or 100% of your earnings if lower). Withdraw from 55 years old.
- General Investment Accounts
Invest as much as you like but subject to Income and Capital Gains Tax rules on growth. Withdraw anytime.
After you have chosen your product, you then need to decide how you wish your monies to be invested. This can usually be invest within a fund, or a portfolio of funds. Any investment should be fully diversified using a mix of underlying assets. These include:
- Cash is the most stable investment option, but your returns can often be lower than the rate of inflation.
- Property is typically an investment in commercial properties such as office buildings, warehouses or shopping centres. In general, property is less risky than shares, but it can go through periods of fairly large losses. Commercial property, house purchases for example, can take a significant length of time to be bought and sold. This can mean that you need to wait before you can get your money out of a property fund. In addition, property valuations are determined by independent property experts. They are based on opinion rather than fact; given you only really know the value of a property when it’s sold.
- Bonds include corporate and government bonds. With bonds, an investor loans money to a company or government. Barring default, the loan is repaid in full along with interest. These are generally considered relatively low risk investments.
- Shares are investments made into UK companies and ones abroad. In general, shares are the riskiest of the four main kinds of assets as stock markets can have long periods of losses. But they can also offer the potential for large gains.