Getting Started

While every investor differs in terms of their personal circumstances, risk appetite and desired outcome, there are some fundamental considerations that should underpin any DIY investment strategy:

  • Keep it Simple
  • Manage Your Risk
  • In It For the Long Haul
  • Keep An Eye

A key decision is whether you are confident to create and monitor your own investment portfolio or if you would prefer to get the expertise delivered by most funds.

It is crucial to note that the value of an investment can go down as well as up, so by committing your capital you are accepting the risk that you may lose money. If you put all your cash in a deposit account there may be less risk of outright loss, but gains are likely to be modest, and you could also see the spending power of this cash eroded over time by inflation.

There is a direct relationship between risk and reward. Accept no risk and returns will almost certainly be low. Take greater risks, and the returns could be higher. The level of risk you take depends entirely on your appetite for risk. That in turn generally depends on personal factors, such as your investment objectives, how long you’re prepared to wait for your investment to grow, and how much of your investment you are prepared to lose.

Online platforms are relatively cheap and simple to research and use and allow you to construct a diversified and balanced portfolio, but that is just the start.

You must constantly monitor your portfolio’s performance as market conditions change as well as your personal circumstances and objectives.

It is important to set aside an hour or so, on a regular basis, to monitor your investments and make any required changes – an advisor would do the same, except that they would be charging you for their service – and all the information you require to do so is readily available online.

What Are You Going To Invest In And How, Once You Open An Account

If you are taking your first steps into the world of investing or returning to the markets after a period away, you may not have a lump sum at your disposal to put to work in the markets and you may be wary of committing too much of your money at once. If you are in this position regular investment can be a good solution.

Investing a set sum at regular intervals can allow you to gradually build a pot of cash over time.

When you’ve decided how you are going to put money into the markets, it’s time to start picking investments. Funds are a popular choice among first-time investors because they enable you to spread risk and hand over stock picking to an experienced fund manager.

If you have a relatively large sum you could construct your own portfolio. You can see what a fund invests in by looking at the product factsheet/fund facts.


Understanding Mutual Funds
Are You A DIY Investor?