The New Individual Savings Account (NISA) rules were introduced in July 2014 designed to help and encourage people to save more for their future and give savers and investors more flexibility and a larger tax-efficient allowance than ever before. This tax efficient ‘wrapper’ can hold investments such as unit trusts, other collectives such as OEIC’s, shares and cash.
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Unit trusts
Unit trusts are a collective investment that allows you to participate in a wider range of investments than can normally be achieved on your own with smaller sums of money. Pooling your money with others also reduces the risk.
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Pooled investments
If you require your money to provide the potential for capital growth or income, or a combination of both, and provided you are willing to accept an element of risk, pooled investments could just be the solution you are looking for. A pooled investment allows you to invest in a large, professionally managed portfolio of assets with many other investors. As a result of this, the risk is reduced due to the wider spread of investments in the portfolio.
The volatility experienced in global markets over the past six years has tested the nerves of even the most experienced investors, making it a difficult time for individuals who rely on income from investments for some or all of their needs.
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Asset classes
When putting together an investment portfolio there are a number of asset classes, or types of investments, that can be combined in different ways. The starting point is cash – and the aim of employing the other asset classes is to achieve a better return than could be achieved by leaving all of the investment on deposit.
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Spreading risk in your portfolio
One of the principal tenets of spreading risk in your portfolio is to diversify your investments. Diversification is the process of investing in areas that have little or no relation to each other.
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Wealth creation
The first step to building wealth starts with a disciplined decision to pay yourself first, then compounds with a disciplined investment approach.
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Question time
Why planning for your future retirement requires answers
We all look forward to stopping work, embarking on a new path and making the most of our new-found freedom. But with all the talk and concern about dwindling retirement funds and our shaky economy, many retirees and soon-to-be-retired boomers need to consider three very important questions, sooner rather than later.
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One of life’s unpleasant facts
Protecting your assets to give your family lasting benefits in an uncertain world
Inheritance Tax (IHT) in the UK is a subject that was once something that only affected very wealthy people. It may be one of life’s unpleasant facts but today it affects more people than ever, partly due to the rise in the property market that has not been matched by a corresponding rise in the IHT threshold.
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‘Am I diversified enough?’
What’s positive for one investment can be negative for another
Different types of investments are affected in different ways by factors such as economics, interest rates, politics, conflicts, even weather events. What’s positive for one investment can be negative for another, and when one rises another may fall. This interlinked movement between assets is known as ‘correlation’.