Become an expert investor

Published by Rachel Lacey on 25 February 2014.
Last updated on 26 February 2014


Once you have researched, chosen and bought your investments you can afford to put your feet up and relax, knowing that your money is working harder than ever before.But you can't afford to shut the door on your investments and forget about them altogether.


Failure to monitor your portfolio can be one of the amateur investor's biggest mistakes. Experts recommend you take a look at it every six to 12 months. Check how your funds are doing, but don't look at them in isolation.

For the full picture compare them with other funds in their peer group. And, as time goes on, don't let your investments drift - make sure your asset allocation is still appropriate for your level of risk.

How to review your portfolio


If you have more money to invest and you are impressed by the returns you're getting on your existing investments you may want to start buying more – particularly if your salary has risen or you have a lump sum in need of a home.

If your portfolio is doing well and your goals, timeframe and attitude to risk have remained the same, the simplest approach is to spread your money across your existing investments.

However at this stage, as your investing confidence grows, many investors will want to start spicing up their portfolio with more interesting – and higher risk – funds. This might mean adding in smaller companies or more international or specialist funds.

Find a financial adviser in your area

These funds might seem a bit more interesting than a run of the mill UK equity income fund, but they come with a health warning - and some experts suggest you don't even contemplate this type of investment until your portfolio is worth at least £10,000.

If you are happy to proceed, you should only invest a small percentage of your overall portfolio and while you will always hope for sizeable gains, you must be prepared for sizeable losses and have the time to ride out what will inevitably be a bumpy ride.

Tips for spicing up your portfolio


As your confidence grows you may also want to look at different investment types.

Investment trusts are another type of collective investment where your money is pooled with that of other investors and managed on your behalf according to the mandate and objectives of the trust. And, like unit trusts, you can choose where in the world you want to invest.

As a general rule, they do tend to perform better than unit trusts, however they are structured very differently and the risks are greater as a result, so investors need to understand the differences before they part with their cash.

What are investment trusts?


Another investment you may want to consider is an exchange traded fund or ETF. These might sound complicated but they are actually a relatively simple and low cost way of accessing the growth of a basket of shares.

Like tracker funds, ETFs mimic the make up and performance of a particular index, which could be anything from the FTSE 100 to a timber or forestry index. You can also buy exchange-traded commodities which can be an easy way of accessing commodities such as gold and other precious metals.

Five-minute guide to ETFs


The most confident of investors, who have the courage and the conviction to hand-pick those companies they think are going to perform well, may want to add some zing to their portfolio with some direct shareholdings.

Concentrating a portion of your portfolio on individual companies can be a great way of boosting your returns - but only if you make the right choices, which, for the majority of us, is easier said than done.

The chances are that if you are acting on tips from someone you met down the pub, the easy money has already been made.

It is much more sensible to buy shares in companies you are familiar with and have a good understanding of – your job for example, may provide you with some insight. If not you really do need to do your research.

An easy way for investors to learn about buying shares is to join an investment club where you can team up with like-minded people to buy shares together.

How to set up an investment club


The cheapest ways to buy shares is from an online sharedealing service. Average dealing fees are around the £10 mark but some companies offer low cost regular investing services. Interactive Investor, for example, charges £1.50 to buy shares, investment trusts and ETFs but you need to agree to make the purchase on an agreed day every month. This makes it a great way for small investors to invest regularly, but it is less suited to the short-term investor who wants to be able to time the market. In many cases your fund supermarket/Isa platform will allow you to buy shares too.

Sharedealing services compared


It is cheap and easy to invest in a whole range of investments online, but if you are confused by the options, have large sums to put away or have particularly big goals in mind such as school fees or early retirement, it may be worth seeking independent financial advice.

Do I need independent financial advice?

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