We were joined by expert guests to discuss two meaty topic areas – approaching retirement and starting out investing - and the role that finance coaching can play in helping people achieve their monetary goals.
Our founder and CEO Holly Mackay was joined by Bestinvest Investment Coaches Matt Morgan and Charlotte Wheeler. You can watch the full webinar replay by clicking the link further down this page, and scroll down to see the answers to some of the questions we didn't get time to cover during the session!
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Check out the highlights
We thought your questions were brilliant and you certainly put our experts through their paces! Here’s a recap of some of our favourite bits.
1 – Should I stay in cash or invest?
Charlotte explains how to decide whether to stay in cash or invest your money, including the balance between having enough readily-available cash and not falling victim to inflation, and the golden rule of how much you should set aside in an emergency fund for those unexpected costs and rainy days.
2 - How do I set my own investing goals?
Charlotte explains how your investing needs are affected by your time horizons and how long you’re willing to wait before you cash in. For example, if you want to use your money in the next couple of years, is it really a good idea to invest, or should you stick with good old reliable cash?
3 – Active vs passive: Which is best?
Our experts tackled the difference between ‘active’ and ‘passive’ funds. Charlotte explained what each one is and the key differences between the two, while Holly and Matthew both gave their take on how to decide which type is right for your investment needs.
4 – Top tip for retirement planning
Matthew told us his top tip for people approaching retirement and the things you need to keep in mind while planning your post-work life, from starting by breaking things down into manageable chunks to making sure you consider any tax implications on your savings.
Your questions answered
Q. Should I invest in lots of different funds or is it best to focus on, say, 6 funds?
A. As Charlotte explained, there’s no magic answer to this question. But as a general rule of thumb, you should look to strike a balance between having enough funds in your portfolio to be adequately diversified without giving yourself too many to keep track of at once. For example, though having 40 funds might sound great from a diversification point of view, can you realistically stay up to date and understand what’s going on under the bonnet for every single one of them? If not, then you’d be better off letting go of a few until you’ve got a number that you feel is genuinely manageable for you.
A good hack for tackling this dilemma is to opt for a ready-made portfolio, which are like baskets of lots of different funds, and you can pick one that suits the level of risk you’re most comfortable with and then leave all the number-crunching to the investment managers. Lots of providers, Bestinvest included, offer these ready-made portfolios, so if you want to get a feel for who’s best to turn to, head over to our ISA compare tables to see which ones we – and our community – rate the highest.
- Boring Money
Q. What is the moment when you should exit an underperforming investment fund and move your money into a different one?
A. Matthew explained how the important thing to remember in this scenario is to ask yourself, whatever the reason an investment is underperforming by your standards, does it still have a place in your overall portfolio? And perhaps more importantly, if you had a blank sheet of paper today, would you still opt to invest in that fund?
Then take the time to review why that fund hasn’t been performing so well – is it a temporary dip caused by some larger macroeconomic event, or is there a deeper issue at play that means you’d be better off removing it from your portfolio? Ask yourself these questions to assess if the investment is still right for you before you make any concrete decisions.
If you've recently let go of an investment and you're looking to replace it with something new, check out our best-selling funds, ETFs, investment trusts and shares of the month to get a flavour of what's popular at the moment.
- Boring Money
ETFs (or Exchange Traded Funds) are parcels of shares aggregated into one fund for us, and we buy and sell these on a stock exchange so they behave like shares. They're pretty simple and a great way of diversifying your portfolio without having to manage dozens of individual shares all by yourself. Our new ETF Hub has loads more on these handy investment vehicles if you want to learn more! Check it out.
- Boring Money
Q. What are your thoughts on ethical investments and the foreseeable market climate?
A. Ethical investment are those which say 'No' to certain types of investments, like tobacco and weapons. They're a bit different to sustainable funds, which say 'No' to stuff, but also actively seek out and buy sustainable holdings. They did really well in 2021 when oil prices were lower, and did badly in 2022 as oil and commodities soared. Over the short-term, our CEO Holly Mackay says she doesn't see immediate change, however if you consider the wall of international money backing green initiatives and the move to carbon neutral, she thinks the outlook over the longer-term for sustainable investments is compelling. You can learn more about sustainable, ethical and all sorts of 'green' investing in our Sustainable Investing Hub.
- Boring Money
Q. What are the best monthly income funds?
A. Lots of the platforms have income fund lists of their preferred funds, so there’s quite a lot to choose from. However, one type of investment that’s especially popular with income investors is the Investment Trust. You might like to look at our investment trust guide to read more about them. The trade body which looks after investment trusts (the Association of Investment Companies) publishes a list of ‘Dividend Heroes’, which are trusts which have built a reputation for having very long track records of paying out decent yields - you might find these a good place to start. Alternatively, Morningstar is a very credible fund research house, so you can see which funds they rate too.
- Boring Money
Watch the full replay
Want to see more events like this?
Many thanks to our sponsor Bestinvest for making this webinar possible, and if you enjoyed it, make sure to check out our upcoming events for more like this!
Next up, we have a free Shake Up Your Savings webinar on Tuesday 14th March 2023 in partnership with Barclays. Our Founder & CEO Holly Mackay will be joined by industry expert Clare Francis, Director of Savings and Investments at Barclays, to discuss how to make the most of your money in a world of financial uncertainty.
We'll be covering everything from is it worth staying in cash to how to use your annual ISA allowance to understanding current tax rules and implications. Click the link below to find out more and sign up for free!
