Michael Carrick

Low-risk investments: advice for first-timers by Michael Carrick

10 May 2022

If financial advisors can agree on one thing, it’s that there’s never a bad time to begin investing. With a new fiscal year underway, today, we’ll be looking at low-risk longer term investments for those looking to join the party.

The number of investment options out there for first-timers is staggering. Those starting with a blank canvas can quickly become overwhelmed by the number of recommendations to be found on dedicated finance websites or discussion forums.

Given that ‘safe’ investments with high returns are never guaranteed, we’ll be focusing on two areas of investment – shares and funds – alongside some important considerations to make when accessing risk.


  • What are your financial goals?
  • Take a personal risk assessment
  • Shares or funds?
  • Discuss your options

What are your financial goals?

There are no hard-and-fast rules when it comes to establishing financial goals. A lot will depend on your age and current responsibilities. Some people may have a specific target in mind, such as buying property or retiring early. Others may simply be looking to invest for that proverbial ‘rainy day’.

It’s important to establish goals in order to give your investments some direction. But most importantly, decide whether you want your investments to supplement your existing income or act as a pot of money that won’t be accessed for years to come.

Either way, don’t view investments as a get-rich-quick scheme. View your investment portfolio as just another means of managing your money and keeping your finances in good health. Get rich slowly!!!

Take a personal risk assessment

Whilst there’s such a thing as ‘low-risk’ investments, ‘no risk’ investments sadly don’t exist. Every investment carries an element of risk, even cash you may hold at the bank or building society .

Low-risk investments are far less likely to collapse, but they’ll probably deliver smaller returns than their high-risk counterparts. Furthermore, rises in inflation can also eat into any gains won by a low-risk investment, so it’s important to do your calculations prior to opening your wallet.

When looking at risk brackets, it’s essential not to invest more money than you can afford to lose. Don’t give your investments the power to ruin you financially. With safety in mind, it makes sense to spread your investments across several avenues, with different elements of risk involved. That way, you’ll be maximising your chances of success whilst minimising the potential for total failure.

Shares or funds?

Ask 100 experts whether shares or funds are better, and you’ll likely receive just as many answers. This is simply down to the number of permutations when it comes to investing. There are countless opportunities in both arenas, and much will depend on an individual’s personal risk assessment and long-term goals.

In general, funds are a low-risk investment when compared to a single stock. Both funds and shares come in two types:

  • Income

These investments are for those looking to supplement their existing income. If your share or fund turns in a profit, you’ll receive it just like a wage.

  • Accumulation

These are for those looking to build a pot of money for the future. Any profit made is added to your initial investment.

Shares explained

Owning a share gives you part-ownership of a company. Companies sell their shares as a way of raising capital, which they then invest in themselves. Shareholders are generally free to sell their shares or buy more at will.

When analysing the safest stocks to buy, these will likely shift from week to week or even day to day. When it comes to making your gamble, it will help to look at previous company performance and industries as a whole.

Share prices usually reflect the success of a company, but economic health also plays a part. Buying shares of global giants will often carry the lowest risk but yield the least return. The key is to find an amazing company on the brink of global success and snap up its shares at a low price before the rest of the world hears about them. That, of course, is easier said than done. Take a look at the best and worst-performing shares of 2021 – how many of these have you heard of before?

Do your research prior to buying shares, spread your assets across different companies and look to the long-term. By their very nature, share prices fluctuate. It’s far easier on an investor’s mind to forget about your shares for five years or more than to watch the markets and panic every time the value drops.


Funds are a great option for first-time investors. A fund includes shares from a range of different companies, so there’s far less chance of losing everything. You’ll likely gain profits from some and losses from others. They can also help to cut down your research time, although the potential gains to be made from funds are often far less than those investing in a specific stock. For a starting point, browse through the best and worst-performing funds of 2021.

Whatever your choice, remember that most investments are flexible. You’ll normally have the option to make alterations to your investment portfolio as your knowledge grows. For example, you might begin by investing in a fund and notice that one particular share within that fund is outperforming the others. There’s nothing to stop you from buying individual shares in that company once you’ve assessed the risk involved.

Discuss your options

If you’re looking to join the investment party this year, consider speaking with an independent financial advisor prior to parting with any money. Do your research, make calculations and form a strategy prior to any meeting. A little knowledge can go a long way, and expert financial advice at the right time can greatly increase your chance of turning investments into long-term success.


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