Essential investment questions

Key consideration to making your decision

With so many kinds of investment to choose from, how do you make the right choice? It’s a process that can be made easier by asking yourself, or a financial adviser, these essential questions:

What are my investment goals?

Everybody has investment goals in their life, from the old adage of saving for a rainy day to planning a comfortable retirement. Managed funds offer a long-term investment strategy that can help you achieve specific goals. Your choice of fund should reflect the type of life event that you are planning for, as its investment style will determine the returns you can expect over differing timescales.

What’s my attitude to risk and potential returns?

All investments involve a balance between risk and reward. Typically, the more risk you’re willing to take, the greater the opportunity for capital growth, but equally, the greater the scope for losses. For example, if you’re nearing retirement, you may want a lower risk approach, to lessen the possibility of your final retirement pot being eroded. However, it’s worth considering what impact your expected longevity might have on your funding for retirement, as it might be appropriate to consider taking the right level of risk for longer. Alternatively, if you won’t need to access your money for some years, you may prefer a higher risk approach, knowing you can adjust your strategy over time. You should discuss the risks you’re willing to take with your financial adviser.

How long do I want to invest for?

Your reasons for investing – e.g. school fees, retirement income, second home – can influence how long you invest for. It’s important to know your timescale. One to three years? Three to five? Five or more? In general, the longer your investment time horizon, the more opportunity you have to ride out periods of market uncertainty.

Do I want capital  growth or income, or both?

Your final choice of fund will depend on whether you have greater emphasis on your savings increasing (in other words, give you capital growth) or providing you regular payments (a steady income). Generally speaking, younger investors are normally seeking to accumulate wealth and will be primarily interested in capital growth. By contrast, older investors often rely on the income from their investments to finance some of their everyday spending, and will want that income to be as high as possible. Other investors may aim for a combination of both.

Do I want to invest a lump sum, or save regularly?

It’s important to decide on the amount and frequency of your investment. Maybe you have a lump sum from an inheritance, or the disposal of property. Or you’re looking to invest a regular amount from your salary. Or perhaps you’d prefer to make irregular payments. Your final decision is likely to reflect what’s affordable within the overall scope of your finances and what your investments goals are.

Am I confident enough to choose my own funds, or do I need advice?

Experienced investors may wish to apply their own skill and judgement when making their fund choice. Others consider it wise to consult an independent financial adviser. Indeed, many lifelong investors still find it valuable to talk to a professional who has access to the most up to date market information. There are also investors who are confident in their choice of investment management company, but prefer to have their precise portfolio of funds chosen on their behalf. If you’d like to be put in contact with a financial professional, please call our investor services team, and we’ll give you the details you need to help find one local to you. Your adviser can guide your fund choice, and ensure it’s suitable for your needs.

If you have any questions, or would like more information about how BlackRock can help you invest, just call our Investor Services Team on +44 (0)20 7743 3300, or visit We will be glad to help. Though we are not permitted to offer you actual investment advice, we can clear up any queries you may have about our funds and how they work. And we can tell you how to find your nearest independent financial adviser.