How much investment risk can you handle?

How much investment risk can you handle?

In spite of all the media headlines surrounding the Bank of England’s decision to raise interest rates in August 2018, the fact was that the raise was only 0.25% and that it brought the base rate up to just 0.75%. Even assuming that banks passed on the rise in full to both savers and borrowers, it still isn’t exactly a huge gain for the former (although it could cause a lot of pain for the latter).  While there is often a case for keeping some cash savings easily accessible if only as an emergency fund, there is also often a case for risking some money in the stock market in the hope of much better returns.

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Feel the volatility - and do it anyway

Feel the volatility - and do it anyway

Stock market volatility can make for compelling TV, both entertainment and documentary, but the reality is actually very mundane.  Volatility happens so investors just have to learn to deal with it and, as the cliché goes, keep calm and carry on.  If that sounds like a classic example of “easier said than done”, then here are some points which might help.

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The importance of balancing your investment portfolio

The importance of balancing your investment portfolio

Diversification and balance are related concepts, but they are different.  Diversification is simply a technical term for not putting all your eggs in one basket.  Balance means that your investments are diversified in such a way as to ensuring that, overall, your portfolio has a decent chance of turning in a decent performance regardless of the prevailing economic conditions at any given time. The key word here is “overall”, you accept the fact that different conditions favour different kinds of investments and do what you can to make this fact work to your advantage.

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Learn to love volatility

Learn to love volatility

People who are not used to being on boats may find that the constant up-and-down motion makes them feel seasick.  Those who are used to boats, however, just accept this movement as a fact of life.  In much the same way, people who don’t really understand the stock market may fear its volatility, whereas more experienced investors just see it for what it is, daily movements which may, or may not, follow the long-term trend they predict for a company.  Here are three points you need to understand about stock-market volatility…

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