The foundational pillars of profitable investment

A cheap and simple solution to diversify

There is a never-ending supply of investment advice. We at new capital link have distilled the fundamental ideas that have helped investors through the market’s ups and downs.

Establish specific objectives

Thinking about your aim should be the initial step in any investment journey. What goals do you have for your investments? You could be saving for retirement or putting money toward a home purchase. How much money do you need to achieve your objective? Also, think about when and how you want to attain this objective, what funds you already have, and what percentage of your monthly salary you can routinely contribute towards your goal. Clear goals may help you stay focused, even when markets are briefly in upheaval.

Keep stability

Gaining a profit is the goal of investing. However, every possibility for a return has a comparable amount of risk. Consider your level of comfort with taking on financial risk. Share and bond prices fluctuate naturally; certain asset classes are more prone to this than others. You must determine for yourself how much volatility you can tolerate without losing sleep in order to determine whether taking on more risk will result in better return chances. By choosing an appropriate balance of shares (greater return possibilities, higher risks) and bonds (lower return opportunities, lower risks), you can control the volatility of your whole portfolio.

Always make sure your assets are diversified, regardless of whether your portfolio has a stronger lean toward shares or bonds. Instead of buying individual shares or bonds, spread your money among hundreds of different businesses to lower your overall investment risk and increase your chances of success.

Keep expenses to a minimum

You could believe that spending more money would get you greater quality. With certain things, that could occasionally be the case, but not with investing. Your returns are sacrificed for every pound you pay in fees. Keep your expenditures down and double-check what you’re spending. This effect may build-up, especially if you’re investing for the long run. The graph below demonstrates how even a little change in prices may result in thousands of pounds in lost profits over the course of 30 years.

Maintain your focus and stick to your plan

A good strategy and a low-cost, well-balanced portfolio can only be realized if you persist with them. This might be challenging at times since responding to market changes is appealing. This is especially true if you read the financial sections of newspapers, where experts are encouraging investors to act. When markets are rising, everyone wants a piece of the pie; when markets are falling, some investors flee to the nearest exit and sell their assets.

However, there’s a considerable probability they’ll be following market fluctuations, purchasing when prices are near their peaks and selling when prices are at their lowest. Because even skilled investors cannot consistently time the markets, sticking to the course will frequently provide you with the best chance of investing success.

This includes ensuring that your asset allocation — the proportion of stocks and bonds in your portfolio – does not deviate too far from its aim. Rebalance your portfolio on a regular basis to ensure that a 60% allocation to stocks does not become 50% during a slump or 70% during a rally, which would no longer represent the risk and return profile you picked at the start.


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by Rachel Buscall

by Rachel Buscall

Co-Founder & Managing Director at New Capital Link. Having started her career in the financial sector, Rachel demonstrated a natural flair for entrepreneurship.

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Alternative investment specialists offering structured opportunities across the UK & Overseas.

New Capital Link is a boutique London-based introducer that offers unique UK & global investment opportunities worldwide.

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