The benefit of saving regularly

For those who can afford to, it isn’t easy deciding on where to invest for the best.

Indeed, what with turmoil in the Global markets and record low interest rates from the Banks, it may seem easier to just avoid the subject altogether!

That would be a shame however, as potentially rewarding opportunities can be missed if delayed.

One idea to consider is the potential benefit of commencing a regular savings strategy. If you have a lump sum which you do not wish to commit to investing all at once or have a monthly amount you are able to save for the medium to long term, then regular savings into funds covering a wide class of assets can be advantageous.

This is because the volatility in the price of the shares in these funds can work to your advantage. As prices fall, more shares are purchased with each contribution. When prices recover, the positive performance of having accumulated more shares in this way is reflected in the value of the portfolio. Using the services of an Independent Financial Adviser (IFA) can assist in selecting the appropriate portfolio and also with decisions over when to consolidate gains or alter exposure to certain sectors.

Such a strategy offers a satisfactory alternative to those with capital to invest but a fear of mis-timing their investment.

The principles outlined above can be used for ISA & non ISA savings as well as pension contributions!  

Before taking any action, a meeting or discussion with a suitable IFA is recommended to make sure it suits your circumstances.

David Eddleston is the Financial Planning Manager with Chartered Accountants Booth Ainsworth LLP and can offer this kind of advice to people interested in savings and retirement options.