The economic situation facing us does seem to be pretty gloomy, and while nobody is particularly happy about that, it does give investors a rare opportunity for capitalising on the situation to potentially make their money grow over the long term. The fact is that, while the stock markets around the world are so low, it actually means that it could be a good time, rather than a dangerous one, to invest your money.
The stock markets have fallen so far in the past few months that the chances are – if the recoveries of the stock market in the past are anything to go by - they'll rebound eventually. Investors who get in now could have the opportunity to buy low – and sell high. Of course, the markets may still go down further before they start to climb again, but economic situations like the one we're experiencing now are nothing new – they've come and gone plenty of times before over the years – and historically stock markets tend to recover after a fall. Past performance is not a reliable guide to future performance.
For anybody who wants to take the opportunity to make investments whilst stock prices are low, there are plenty of options. Take Halifax for example – as a major high street bank they have a range of investment products, including ISA, Collective Investment Plan, pensions and stakeholder pensions, that suit most peoples' situation, no matter how much money you have to invest.
As an investor with a UK institution you get the added reassurance of the Financial Services Compensation Scheme (FSCS), which safeguards some of your money should the provider you’re investing with fail. For products such as Stocks and Shares ISAs, Collective Investment Plans and Child Trust Funds, each investor is covered for up to £48,000 of losses. That's made up by 100% of the first £30,000 and 90% of the next £20,000. If you want to know more about the scheme, Halifax have a page on their website which explains things in full.
It also makes sense to get the best possible advice. An IFA (Independent Financial Advisor) is trained to give financial advice on products from a wide range of providers and he/she is not limited to only one company's products, so it could pay dividends to go to see an IFA, as they can help assess your financial situation to give you advice that's tailored exactly for you. You can also visit websites that will advise on what to do so that, when it comes to decision time, you know exactly what to go for.
Of course you must never forget that investments can go up as well as down, but investing while prices are low may benefit you in the long term if the stock market recovers. Plus if you spread your investment across different funds you may reduce your risk, meaning that you can look forward to the end of the economic slowdown with your money already working as hard as it possibly can for you.
