As the tax year end fast approaches, Darren Hepworth, Head of Global Trading, TD Direct Investing provides investors with some strategies and things to consider:
“In the countdown to tax year end, there are some basic fundamentals people should consider right now to ensure they are making the most of their tax ISA allowance. After D Day of April 6th it’s worth remembering that those who invest into their allowance from the start will benefit from a full year of growth. Five key things to consider are:
1. Maximise Tax breaks and don’t miss the deadline
Before the end of the tax year on April 6, make sure you utilise your tax allowance. If you do already have an ISA, have you maximised the allowance? Also, watch out for the deadline this year – it falls over the Easter bank holiday weekend.
2. Think about the level of involvement you want in managing your investment
How actively involved do you want to be in the management of the investment? The less time you have, it would be worth you looking at a managed fund Vs trading the stocks and shares yourselves. The advantage of a fund is that it also diversifies your risk *.
3. What is your desired outcome – capital growth or income?
Having a clear investment strategy is essential. If you are investing for growth, it’s normally recommended that you think about a minimum time horizon of five years or more.
4. Understand your true risk appetite
It’s worth re-highlighting the fact that the risks involved in investing vary hugely. This will be reflected in the returns, so understanding your own risk appetite and tolerance for short term loss is key.
5. What is your investment preference?
Whether managing a portfolio of shares yourself or investing via either a passive or actively managed fund, you should be thinking about which sectors are likely to best meet your needs for growth and /or returns. Do any markets or specific sectors look undervalued and therefore ripe for growth.
N.B.
The tax treatment of these products does depend on your circumstances and might change
Please note that none of the opinions we provide are a “personal recommendation”, which means that we have not assessed your investing knowledge and experience, your financial situation or your investment objectives. Therefore you should ensure that any investment decisions you make are suitable for your personal circumstances.
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