Do I Invest and What do I Invest In?

Investing is an effective way to build on your wealth. By putting your money away each month in a variety of different investments, you are potentially increasing your wealth every year, setting yourself up for financial freedom in the future. Investing will help you secure your future and present financial security, from the power of compounding, to having a diversified portfolio, investing in your finances is key to a secure future. 

Gold

Gold bullion is trusted by many investors when it comes to wealth preservation. The value of gold tends to grow over time, even if it does slightly peak and trough, you will notice that there has been a slow, steady growth in the value of gold over the years. Gold has a hedge against inflation. Investors for this reason look to invest in gold to protect their finances, given gold maintains its value and appreciates when the value of the dollar decreases. 

Gold generally withstands fluctuations in interest rates, as it can’t be printed to control supply and demand. The gold that is remaining on the planet, is all that is left. It maintains its value over time and has proven it’s worth, acting as an insurance policy when the globe faces economic uncertainty. Additionally, gold is fantastic for diversifying your portfolio and providing less risk to your investment portfolio.

Giles Maber from Sharps Pixley says that ‘due to financial uncertainty, it is no surprise that we are seeing central banks adding gold to their reserves. Coupled with the threat of international hostilities, central banks are seeing gold as a way of reducing dependency on other nations. For retail investors, gold continues to be a safe investment, but this central bank buying could cause already high prices, to become unaffordable for many over the coming months. The result could be a much needed boost for silver.’

ETF’s

ETFs offer investors access to a variety of financial markets at only a fraction of the cost of the investments funds. The majority of ETFs track the performance of an investment on the stock market, essentially replicating the movements. Barclays says the following:

To put this into context, the ongoing charge for the Vanguard FTSE 100 UCITS ETF, which tracks the FTSE 100 index, is just 0.09%. According to the UK Government’s Money Advice Service, actively managed funds typically charge from 1-1.5% The difference may not sound like much over the course of a year, but it adds up if you hold your investment for a number of years.’

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