Stage 2 - how much time, knowledge and experience you have.
When you know what level of risk you are prepared to accept in order to get the returns you want, the next step is to decide where to invest your money. Use the three investment profiles below to help you make your choice.
These profiles reflect different levels of experience and knowledge. And because investments shouldn't just be bought and forgotten, they also reflect the different amounts of time available for you to look after them. We've termed these low, medium and high levels of 'input'.
Choose the profile that most closely reflects your own circumstances, and we'll show you our suggested mix of three investments types - ETFs, Funds and shares. Use it as a good start to deciding which individual investments to explore further. You can then use our free investments tools to help you decide where to invest your money.
Low
"I'm pretty new to investing and have only little or limited understanding of how the stock market works. If I have invested before, it's only been in a few funds, mainly through regular savings or in my pension, but even then I wasn't picking them on my own, and I've limited experience of choosing individual shares.
Although I try to stay in touch with what's happening by reading the business news and personal finance sections of my paper, I don't have much time to monitor my investments on a regular basis - looking at them perhaps 3 or 4 times a year at best."
Risk:Cautious - Input:Low
50% UK Gilts
50% UK Bonds
Medium
"I understand the broad principles of how the stock market works, the differences between different types of investments, and the influences on share prices.
I like to keep up to date with the business and personal finance news in my paper and via specialist magazines which I read from time to time.
I have a few shares and other investments which I've acquired over time and I tend to take a look at them quite regularly, about every 4 to 6 weeks on average. In a typical year I buy or sell investments every couple of months, on average."
Risk:Cautious - Input:Medium
30% UK Gilts
30% UK Bonds
40% Cautious managed fund
High
"The stock market is a real interest of mine. I've been investing for some time now and consider myself experienced. I invest in a well-diversified wide range of UK and international securities, covering all aspects of the market.
I routinely read the business and finance sections of my paper, subscribe to investor magazines and have signed up with some investment websites and newsletters. I look at my investments at least once a week and over a typical year I'll probably buy and sell at least once or twice each month (on average)."
Risk:Cautious - Input:High
30% UK Gilts
30% UK Bonds
40% Cautious managed fund
10% FTSE100
Of course, the point at which you move from one type of investment to another, say from ETFs to Funds, isn't a clearly defined point. It's often a question of balance, preference and timing. However, as an account customer of The Share Centre, you can call our in-house experts to help work out an investment plan tailored to you.