• Learn about investing
• Strategies and considerations
• Establish your investment objectives
• What do I want from my investment?
• What level of risk will I accept?
• How can I help reduce my level of risk?

What level of risk will I accept?

Risk

Before buying you need to decide the level of risk you are willing to accept.

First ask yourself three key questions:

1. How much money can you afford to invest?
2. How much of this can you afford to lose?
3. Over what period of time are you looking to invest?

What type of investor are you?

As a rough guide, if you are a cautious equity investor, a portfolio of solid blue chip investments might be appropriate. However, not all companies react in the same way as the FTSE 100 index so be sure to choose your investments carefully.

More aggressive investors might think about investing outside the FTSE, in riskier markets that can carry potentially high rewards and losses, like the Alternative Investment Market (AIM).

In general, shares are considered a moderate to high risk compared with other investments.