RH Investment Services
RH Investment Services welcomes you to the latest edition of Investment Bulletin, our
update on developments in the world's finance sector.
We hope you find the contents of interest. If you have any questions, or would like to
discuss any of the points raised, please give us a call.
Investing for beginners
Many investors are happy to earn a return from their money simply by sticking it in a
savings account. For those who want their money to work harder, the stock market can
offer greater potential, although the reward is dependent on the amount of risk you are
willing to take.
By investing in the stock market, you’re buying shares (or equity) in a company in the
hope the company will perform well and the share price will go up. Of course, it can go
down as well, which is the extra risk you take on. Stock market investments should be
viewed over the medium to long-term and most professionals will advise you to keep
them for at least three to five years.
If you’re looking to invest directly into a company’s shares, then you should concentrate
on companies whose businesses you understand. It helps if you can keep on top of
market news and have some knowledge of the way in which the stock market operates.
This is difficult for many investors who don’t have the time, experience or capital to
invest directly. As an alternative you can invest in equities by putting your money into a
collective investment scheme, such as a unit trust or an OEIC (Open Ended Investment
Company). Your money will be pooled with that of other investors and the fund manager
will select which companies to invest in. You will pay a fee for this service.
Some funds aim to provide you with an income, while others are designed to deliver
capital growth. Some funds simply track a stock-market index and have no element of
stock-picking. Other funds are actively managed and target a particular sector of the
stock market, or geographical region. These funds tend to carry higher fees as a