Three golden rules of investing

MoneyPlus Features Team

Life is full of choices and choosing to invest your money might be better than simply saving it. While investing can seem a big decision, it can bring a number of benefits over saving.

Your financial goals are probably quite simple: save as much as you can to meet the goal you’re planning for.

This could be anything from saving for life after work, a big event or to support your children or grandchildren’s future. Nothing is guaranteed, but by choosing to invest your money over the long term, you’re giving it more chance to grow than if it were in a simple bank savings account.

Read more on the difference between investing and saving here.

What’s your goal?

No matter what your savings goal, there are investment products available that could help you. The most common are stocks and shares Individual Savings Accounts (ISAs) or pensions – yes, pensions are invested, not everyone knows that. Both of these could offer a tax-efficient home for your savings.

As well as considering which product to invest in, you’ll need to consider where you plan to invest your money – for example picking a pension and then deciding which investment options your pension money is invested in.

That’s because your investment choice will affect how your money grows. Remember though, the value can go down as well as up and may be worth less than was paid in.

Here are three golden rules of investing:

  1. Take a long-term view
  2. Make sure you have a good mix of investments
  3. Check your investments are doing what you expect

Take a long term view

It’s easy to get caught up in the drama of short-term market falls and the accompanying headlines.

Although it can be tempting to sell some of your investments when markets fall and move your money somewhere ‘safer’, it’s not normally a good idea.

If you do, you’re likely to be selling after markets have already fallen – and crucially, before they rise again.

Even when markets have short-term setbacks, history shows us that they recover in the long term. So pulling out at this time means you run the risk of missing the rebound, and potentially having less money than someone who kept their composure, and their money invested.

For more about what’s happening in markets, read our monthly review by Aberdeen Standard Investments’ Andrew Milligan.

And for more investing tips, see our website.

Make sure you have a good mix of investments

One thing investment experts tend to agree on is the importance of spreading your money across different types of investments, geographical locations and industries, which is called diversification.

Different types of investments behave in different ways at different times. So, if you’re investing in only one or two kinds, you could be exposing yourself to quite a degree of risk.

However, if you diversify across investments, it can help to smooth returns, and the overall value of your investments should be less likely to change dramatically if markets move. This can be particularly valuable during periods of market volatility.

Check your investments are doing what you expect

It’s so important that you regularly check your investment choices to make sure they’re still doing what you expect them to do.

Why? Well, your goals, timescales or circumstances may have changed, so you might want to consider adapting your investment choices to suit.

Or your investments may no longer be heading in the right direction to meet your goals and now might be a good time to refocus.

The final value of your investments will largely depend on three main factors: how much you pay in, how your investments perform and how long you’re invested for.

For example, you may have originally invested in an ISA for a specific purpose, such as a house deposit, but your plans and timescales have changed. So one of the things you might want to think about to meet your new goal is taking a bit more or a bit less risk with your investments.

Or, if you’re invested in a pension and getting closer to retirement, you might want to check you’re invested in an option that will prepare your money for how you’re planning to take it. There are options called lifestyle profiles which can do this for you.

The final value of your investments will largely depend on three main factors: how much you pay in, how your investments perform and how long you’re invested for.


investments chart


How following the golden rules can help you hit your goals

Overall, try to remember that ups and downs in financial markets are part and parcel of investing. Keep your composure, think of your long-term aims and by following these golden rules you could help make sure your money is in the best place to meet your financial goals.

If you’re not sure where to invest, or generally need more help, it may make sense to speak to a financial adviser. Please note there’s likely to be a cost for this.

If you’re considering taking advice and don’t have an adviser, you can find one in your area on Or visit our website for more information about financial advice and 1825, Financial Planning from Standard Life*.


* 1825 is a trading name for the Standard Life Aberdeen group’s advice business.

The value of all investments can go down as well as up and may be worth less than was paid in. The information in this article should not be regarded as financial advice and is based on our understanding in November 2019.

Laws and tax rules may change in the future and your own personal circumstances will have an impact on tax.