14 May 2014

Not Everyone Should Try Investing

There's no doubt in my mind that investing requires some faith.

You are handing over your money to someone else who may be able to do a good job with it and give you a good result, but on the other hand... At the very least you may well see times when the value of your investment is less than what you put in.

Actually, the government-sponsored pension scheme - NEST - has a novel approach to that. For the early years of pension contributions you are invested in foundation funds which will not grow very much but neither will they fall in value. That gives your pension assets some time to grow and helps to avoid people opting out when they see values going down and don't understand that it happens.

For people who are used to a guaranteed return on their money in the form of bank interest (albeit not much!), it may be too difficult to make the leap into investing, even though the long term case is clearly better.

So if you talk to me as a financial adviser, don't expect me to press you to start investing. It may be that it would not be a comfortable experience for you.

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