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Rules For Successful Investing

  • Returns achieved in the past by an investment can only ever be a guide for the future.
  • If possible, seek professional and independent advice. Follow the Shape of Money's guide to getting the right advice.
  • Diversify your investments across asset classes, industries, fund managers and countries. Review the Shape of Money's guide to portfolio investing.
  • Re-invest your interest and dividend income. Let compounding growth work for you.
  • The higher the return on an investment, the greater the risk.
  • Understand the tax implications of investments, but don't let tax concerns drive your investment decisions. Governments close loopholes as quickly as we find them.
  • Invest in assets which generate some form of income, such as shares, property, cash and fixed interest. And, correspondingly, don't invest in assets which don't generate income, such as personalised number plates and art.
  • Ignore volatility over the short term. For example, shares will move up and down every day. Ignore these movements; you're only concerned with the long-term trend.
  • When you compare the returns of different investment options, ensure you're comparing like with like. For example, are the stated returns calculated after fees and inflation?
  • Drip-feed your savings into an investment. Make your money work as hard and as quickly for you as possible. Take advantage of dollar cost averaging.
  • Be patient; successful investing is a long-term venture.