Saving money is a goal many people will have, but savers are not currently being very incentivised, as interest rates struggle to recover from the ongoing COVID-19 pandemic. Consequently, Britons are being encouraged to open up to the idea of investment as a potential solution to their savings woes, as it could stand to help in some circumstances. Many people may be averse to the idea of investment due to the perceived risk it holds over cash savings.
Ms Williams has said it is still sensible to keep three to six months worth of savings in cash, varying in amounts according to personal circumstances, but after this point, investing can be pursued.
She added: “We would recommend that people start small, dip their toe in the water, and put away a small amount each month.
“This can be putting away what you can afford into a diversified portfolio to mediate risk as much as possible.
“Some people will choose to look at diverse portfolios and exchange-traded funds (ETFs) to see what suits them best.”
But Ms Williams also expressed her frustration with the preconceived notions of what investing will involve. Namely, that individuals will stand to make a lot of money.
This she said, is unlikely to be the case, and instead, she posited investment as a way to receive a potentially good return over a long period of time.
However, once this preconception is tackled, Ms Williams said, it is vital to remain engaged at a sensible level with one’s investments.
While overly-checking and tinkering with investments regularly is not considered a good course of action, Britons should think about reviewing their portfolio at times where it might be sensible to do so.
This could include major life events or a change in personal circumstances which may alter a person’s outlook in terms of the end result they are hoping to achieve with their investments.
Regardless, Ms Williams concluded by stressing investment is a long-term endeavour, that requires a certain degree of patience if Britons want their efforts to be successful.
She said: “The problem is that with investment you receive a statement or look at your account online and you can immediately see the absolute rate of return.
“This might show your portfolio has gone up by seven percent over the last year, and it’s only a small amount of money. But really, the money that you are making often comes from dividends, and then subsequently, the compounding of return.
“If you’ve made a certain amount this year, the growth you make next year will then be on a larger amount.
“It’s a technical point, which might be challenging for people to get their heads around at first, so it’s worth really considering.
“But this is why investment is slow, it is not something you do quickly to get an instant return.”