I’m a novice investor… how do I manage my investments?

Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

I appreciate that you’ve said that you feel more comfortable with lower risk. And that’s fine. You just need to understand that lower risk generally means lower potential returns. If you are thinking about investing for the long term (investing should be for five years plus), it’s worth factoring time into how you feel about risk. Markets go up and down all the time. But over prolonged periods of time, history shows that they do recover. If you’re too cautious - and you have years of investing ahead of you - you could potentially be missing out on potential gains (although there are no guarantees). It’s about taking the right level of risk for you.

Once you’ve settled on how comfortable you feel with risk you can start choosing your investments. What you’re aiming for is to hold a mix of investments (this is also referred to as a well-diversified or balanced portfolio). And the reason you want to do this is that different asset classes (cash, bonds, shares, funds and so on) act differently in the same economic conditions. The idea is that some will perform well at a time when others don't do as well, so they help to balance each other out to potentially give you a smoother ride over time.

“How to search and know what to buy?”

The good news is that we’ve got lots of tools to help you with this - depending on whether you need lots of support or (as your confidence grows - which it will with time) you’re happy to go it alone.

As you’re new to investing, you probably want more support to begin with. Here are a few ways to go about it.

• Navigator - this is is a tool that asks you some questions. You tell us what’s important to you and we’ll give you a few diversified fund options to consider. Open Navigator.
• Four fund picks for 2024 - Tom Stevenson is an investment director here at Fidelity. Each year he picks four funds that he invests in his own ISA or SIPP. Learn about Tom’s picks.
• Select 50 - is a list of our favourite funds that have been selected by experts.

You can find more about choosing investments here.

“Do I buy and leave for years or do I need to continuously buy and sell and constantly monitor how they are doing?”

There’s an investing adage that stands the test of time. It’s not about timing the market, it’s about time in the market. Timing the market (buying and selling to maximise returns or minimise losses) is something even the experts find hard to do. That’s because you have to make the right decision twice - when to buy and when to sell. As I’ve already mentioned, markets recover over time. So, it’s best to think long and hard about what to invest in, then give your investments the chance to grow over time.

My recommendation is not to look at the value of your investments daily, weekly or even monthly. Perhaps check in on them three of four times a year - or, of course, if your personal circumstances change for any reason.

And finally… think about financial advice.

If you have over £100,000 to invest, or your needs are more complex, you might like to talk to a financial adviser, like myself. I find that my customers take financial advice because they don’t have either the time, knowledge, confidence or inclination. Getting a personal financial recommendation gives them peace of mind. You can learn more about our financial advice service here.

About Fahima Hussain - Wealth Adviser

Fahima’s worked in the banking industry and financial services for more than 23 years and helps customers in many aspects of financial planning and advising them to help build better financial stability. As a Wealth Adviser, she enjoys working with customers to help them achieve their financial goals and aspirations, by understanding where they are now and where they want to be.

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