Given recent market events, you may be wondering whether you should make changes to your investment portfolio. It is crucial for investors to ask themselves, “Am I a safe investor?” and only make investment decisions after understanding the risks involved and considering your long-term financial goals. While Crowd for Angels as an FCA regulated company cannot tell you how to manage your investment portfolio, here is a self-assessment checklist that gives you the tools to make an informed decision.
- Take an honest look at your entire financial situation:
Before you make any investment decision, sit down and take an honest look at your entire financial situation — especially if you’ve never made a financial plan before. The first step to successful investing is figuring out your goals and risk tolerance. It is important to keep in mind that there is no guarantee that you’ll make money from your investments.
- Create and maintain an emergency fund:
Most smart investors put enough money in an easy access savings product to cover an emergency, like sudden unemployment. A general benchmark is to have up to six months worth of expenses in savings so you know it will be there when you need it.
- Pay off high interest credit card debt:
There are few investment strategies anywhere that pay off as well as, or with less risk than, merely paying off all high interest debt you may have. If you owe money on high interest credit cards, a great move under any market condition is to pay off the balance in full as quickly as possible.
- Start small, especially if you are a new/young investor:
Investing a small amount every month is a great way to get started. You could, say, kick off with £25 a month into a single investment. We pride ourselves to be the first equity crowdfunding platform to offer minimum investments as low as £25.
- Don’t put all your eggs in one basket: In other words, spread your investments around a variety of assets in order to protect yourself if anything goes wrong. It is recommended to put no more than 10% of your investment pot into any one crowdfunding pitch.
- Use your ISA allowance:
Wrapping your investments in a Stocks and Shares or Innovate Finance ISA means you won’t pay tax on profits, dividends or interest, or need to include them on your tax return. This tax year you can invest up to £20,000 in an ISA wrapper. You can invest all, or some, of your allowance in any one ISA type.
- Be patient and stay invested:
Investing can be a bumpy ride, but it generally pays to hold your nerve. You need a time frame of at least five years, ideally far longer. If you can sit tight through market falls your investments may bounce back and go on to be worth more.
Crowd for Angels is an FCA authorised and regulated crowdfunding platform that funds companies through the issue of shares, crowd bonds and digitalised assets to investors. Begin your fundraising journey or start exploring top investment opportunities here.