2 February 2017
Your top three financial goals – and how to achieve them
By Sam Slator, Communications Director
In January, we polled FundCalibre visitors on their main financial goal for the year ahead. Unsurprisingly, half of our respondents said they were saving to buy a property.
Next up was organising pensions – now more important than ever as mandatory contributions come into play. We must all make choices around how we save for retirement and the good news is there may be more options than you think.
And thirdly, around 15% of our visitors had a goal of investing in funds for the first time!
Here are our tips for achieving your financial goals in 2017.
Saving to buy a property
First up, you must be very careful about your time frame if you’re saving to buy a property. The last thing you want is to be six months away from buying your dream home and suddenly your deposit shrinks because the stock market has taken a tumble. Typically, a medium-term investment time horizon for stock markets is considered three to five years.
There are various types of accounts into which you could save to buy a home, including a cash ISA, a stocks and shares ISA, a help to buy ISA or, from April 2017, a lifetime ISA. These last two in particular may suit first time home buyers as the government offers to put in some money too.
If you are going to invest, a few core funds in key developed markets could be a good way to diversify. For UK equities, our Elite Rated Investec UK Alpha and Royal London UK Equity Income are strong propositions. In Europe, the Elite Rated BlackRock Continental European fund offers exposure to a selection of the region’s best businesses. Or you could go for a global fund with a foot in lots of camps, like the Elite Rated Fidelity Global Dividend.
Organising your pension
I can’t recommend strongly enough getting on top of your retirement savings now. Mandatory contributions are now in place for many workers, but even if they aren’t, you can set up your own pension plan.
You can save via your workplace automatic enrolment scheme, into a self-invested pension plan (SIPP) or, once again, into the new lifetime ISA account when it becomes available in April.
If you’re some 30 years or more away from retirement, the conventional wisdom suggests you can also afford to take a bit more investment risk with your money for the potential of higher returns. A portion of your savings in core funds such as the above could be a good idea. But you may also want to consider emerging market economies, or funds that invest in smaller companies whose growth potential may be very significant over the long term.
Some Elite Rated funds that match these criteria include Lazard Emerging Markets, Aberdeen Latin American Equity and Ashburton India Equity Opportunities. On the small-cap side are Hermes US SMID Equity and Wood Street Microcap.
Investing in funds for the first time
If you’re gearing up to invest for the first time, we can help you to research funds and feel prepared. Browse our education section for a range of useful information such as understanding ISA basics, how to choose a fund and how to invest for income.
Then, when you feel ready, you can browse our Elite Rated funds and start to read our research notes to help you learn about different types of investments and what makes the good ones stand out. If you looking to narrow down your list, you might take a look at the most popular ISA funds from last year¹, which include the Elite Rated Woodford Equity Income, Rathbone Global Opportunities and Franklin UK Mid Cap.
No goal? We can help with that too!
A number of respondents also said they hadn’t yet made a savings goal for the year ahead. If this is you and you’re looking for ideas, be sure to read our piece on how to get started investing, which includes a section on how to think about timeframes and risk so that you can set goals that are right for you.
Where to next?
- 2017: the start of a new cycle?
- A different view on ‘quality’ investing
- Portfolio Adviser Fund Awards recommend 9 Elite Funds to new investors
¹ Chelsea Financial Services client purchases within an ISA, 01/01/2016–26/01/2016
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Sam's views are her own and do not constitute financial advice.
©2017 FundCalibre Ltd. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. FundCalibre, shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use.