7 Investment Ideas in the UK
Updated: Sep 19
The UK has been in a bit of an economic slump recently, but there are plenty of investment opportunities to be found in the country.
Whether you’re looking to put your money into the economy as a whole, or you’re looking to invest directly in companies, you can find plenty of options that offer strong returns while still being safe from catastrophic loss.
Here are seven of the most popular investment ideas in the UK today!
While there are many ways to invest in property, such as buying a home and renting it out, or even just investing through buy-to-let options (where you own a property then rent it out), you can also dabble with investment trusts.
These are companies that specialize in owning and managing different property assets, from blocks of flats to whole shopping malls. You get a slice of all their properties, meaning your capital grows faster because you're spread across multiple projects.
If you're just starting out with your investment portfolio, then opting for an investment trust could be a good way to begin.
Bonds are a type of investment that gives you an agreed-upon stream of payments over time, while also offering protection against rises and falls in interest rates.
Bonds are issued by companies or governments to raise money for specific projects, like building a road. They usually pay out at a fixed rate of interest until their end date.
However, unlike bank accounts, there is no guarantee that your capital will be returned to you upon maturity. Government bonds have their own risks and rewards. When rates rise, bond prices fall (meaning you’ll get less back than what you invested) and vice versa.
Buying shares is a great way to invest for growth, as well as income. Not only does it allow you to buy stock in companies across all industries, but you can also diversify your portfolio through mutual funds and index-tracking products like exchange-traded funds (ETFs).
No matter what size your investment or how much time you have to devote to managing it, there are smart ways of making money from stocks that can help you get ahead financially. If you’re looking for investment ideas in London, here are a few tips
4) Investment Trusts
Investment trusts are a special type of investment fund that pool investors’ money to buy shares of stock. They offer various benefits over regular mutual funds and an excellent way to diversify your portfolio.
The best part about investment trusts is that you can invest as little as £100, making them ideal for younger investors just getting started with their savings.
But don’t be fooled—investment trusts also provide plenty of growth potential, particularly if you’re willing to invest long-term and allow profits to compound.
ISAs (Individual Savings Accounts) are a way to invest money while also getting tax breaks. ISAs were introduced to Britain in 1999 and have become an integral part of investing there. Like a 401(k) or IRA, you contribute after-tax money, but can deduct that amount from your gross income for tax purposes, thus lowering your tax bill.
And once you’ve maxed out your annual contribution (which is equivalent to $5,500 per year), those earnings grow tax-free for as long as they stay in your account—similar to Roth IRA accounts here in America.
6) Index Tracking Funds
An index fund is a type of mutual fund or exchange-traded fund (ETF) that tracks an index of stocks, bonds, or commodities. If you want to make money on investment ideas uk over time, an index tracking fund may be your best bet.
For example, if you believe that British banks are going to outperform other investments over time, why try to beat them when you can join them? The iShares FTSE 100 Index Fund (Symbol: ISF) invests only in large British companies. It’s heavily weighted toward financial services and consumer discretionary stocks.
While you can invest in individual stocks and bonds, one of your best options is to buy shares in a mutual fund. Mutual funds are professionally managed investment portfolios that invest in numerous stocks and bonds.
There are several kinds of mutual funds, including equity funds (stocks), bond funds (bonds), money market funds (low-risk investments) and others.
When you purchase a mutual fund, you gain instant diversification because many companies' stock price movements generally don't correlate well with each other.
Additionally, it's often cheaper to buy into a single fund rather than own each company individually; if you're going to be investing $10,000 over time anyway, why not save on brokerage fees by owning everything together?
7 Investment Ideas in the UK - The Bottom Line
There are plenty of investment opportunities for you to choose from if you’re interested in investing. For example, some experts advise that it’s a good idea to have a portion of your portfolio allocated toward precious metals and resources.
However, some investors may be wary of these investments because they can be volatile; it’s a good idea to do research on investments before you make an actual purchase so that you’re not losing money simply because you didn’t know what you were doing.
Your go-to financial adviser, accountant or lawyer can offer investment ideas, as well as help when it comes time to execute them by purchasing stocks and bonds.