Little and often for a big reward

Steve Weisner - Independent Financial Adviser Radcliffe & Newlands

In the world of investment, timing is everything. However, no matter how much hype we hear to the contrary, it is a fact that no one can predict what the market will do or when. This makes it difficult, not only deciding when to invest but also when to pull those investments out of the market.

This is where the benefits of pound cost averaging come into play – or in layman’s terms, regular savings. The theory is that by regularly putting smaller amounts of money into a fund or other investment, the risk of getting your timing wrong is reduced. Compared with punting an entire large lump sum in one go at a single price, the risk is mitigated by the fact your smaller sums will buy in at a variety of prices.

In a rising market, regular savings would under perform the growth of a single lump sum as the later investments would miss out on the growth of that rise in the early days. However, in an up and down or falling market, the opposite is true. Later investments would buy in at lower or alternating prices –lower than the original price and would therefore gain a little more when the market finally did rise.

Similarly, regular saving is a great way to build up a lump sum from zero. A lump sum of £5,000 can seem a tall order for some people.   However, putting aside £100 a month from your income is less of an issue – and by doing so, even if you saw no market movement or interest whatsoever, you could build up savings of £1,200 a year.

Most investment products offer regular savings as an option - investment funds, ISA’s, life assurance and pension plans. Once you start saving, you will be surprised by how quickly a significant amount builds up – and the longer you leave it, the more impressive that becomes. If you are considering equities for the first time, this is also an ideal way to start as the small amount you miss every month has less impact on your lifestyle – and you will be less sensitive to the short-term ups and downs of markets as falling prices give a chance to buy the same investment at lower prices.

Contact Steve at Radcliffe and Newlands and he'll be happy sit down and discuss all your investment needs.

Steve Weisner
Independent Financial Adviser
Radcliffe & Newlands
5th Floor Crystal Gate
28-30 Worship Street
London
EC2A 2AH  

Tel: 020 7382 0437
Fax: 0207 374 0462
Email: SWeisner@myeggnest.com
www.rad-new.com

If you have a question or if you would like to discuss becoming a client with Radcliffe & Newlands then do please complete the very short form on the right hand column of this page.

You will usually get an answer within 24 hours except during the weekend or bank holidays.

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Little and often for a big reward

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