Do you not endorse providers of a smaller size? Is there a reason for this?
18 March 2022
Question by Priya
Hello, love your site. I just wanted to ask a quick question. Your recommendations (ETFs) seem to be the big companies but on Reddit they talk a lot about smaller companies like Invest engine etc. do you not endorse providers of a smaller size? Is there a reason for this?
Answered by Boring Money
Many thanks for your question.
Although I cannot provide specific advice here, you may find the details below useful.
Investing in a well-diversified global fund is normally a good place to start. These funds often consist of large companies that have a proven track record - when your funds are invested in hundreds, or thousands of companies around the world, this gives you a good chance of achieving a steady return over the long term.
Smaller companies certainly have the potential to grow much faster, but there is normally more risk involved.
You should weigh up what your investment goals are, along with how much risk you are prepared to take. Do remember, that Reddit users can be anyone - they are not regulated advisers so please do your own research before acting on the advice. Or seek professional financial advice.
Having a sit down and think about what your long-term investment goal is, should be the first point of call. Are you saving for retirement, a rainy day, or a specific goal like buying a house/car. Generally, investments should be held for 5 years+ to provide the best chance of achieving positive growth.
Picking stocks and shares individually is a tough game. Many professional fund managers struggle to achieve long-term results. Investing in well-diversified funds, over the long term will give you a good chance of achieving positive growth. As mentioned, these funds will often consist of the best companies on the planet, run by some of the smartest people on the planet.
There are smaller company funds available on the market - you could research these. However, as mentioned, picking stocks and specific funds in niche areas is a tough game to get correct. Thinking about your goals/objectives and relating your investments to these is incredibly important.
I hope that helps for now.