There are no guarantees when it comes to investing, and the value of the investments in your account can go down as well as up.
Although the aim of investing is to grow your wealth, you may not get back the whole amount that you invested.
Below are some of the different risks you should consider when choosing and managing your own investments.
Managing your investments
• Stock market investments should be held for the medium to long term (at least five to seven years) as they can be more volatile in the short term, so please make sure that you can invest for this period of time
• We don’t offer advice, so you’ll be responsible for selecting and managing your own investments
• This includes reviewing your investments and making any changes you think are needed
• Past performance is not a reliable indication of future returns
• You should make sure you understand the costs and charges you’ll pay for investing, to ensure you’re getting good value from the investments and accounts you hold
• You’ll receive a contract note when you buy or sell investments, which will detail the charges applied
• Foreign exchange charges will also apply when you buy or sell US shares, and when we convert dividend and other corporate action payments
• We’ll send you an annual costs and charges statement showing all the charges applied to your account, including charges from fund managers
• The tax treatment of certain accounts depends on your personal circumstances and tax rules could change
• You should ensure you have cash that you can easily access to cover any unexpected expenses in the short to medium term before you start investing
Investing risks
You can deal in a range of investments. Some types of investment carry a higher degree of risk than others.
Cash
Although cash is generally lowest on the risk scale, it does come with a higher inflation risk. Cash savings will rarely bear inflation, meaning the real value of your savings could be eroded over time.
Funds
Although funds can help you diversify your portfolio, annual fund manager charges can vary. You should read the key investor information document (KIID) before you invest to understand the charges you’ll pay.
Bonds
Although bonds come with a promise to repay your money at the end of the term, alongside interest (coupon) over the life of the bond, there are no guarantees.
There’s a risk the issuer of the bond defaults (goes bust) and you lose your money.
Credit ratings are not a guarantee or recommendation and can be subject to change.
Shares
If you’re investing in individual shares, there’s a risk that a company you invest in goes bust or performs poorly. This can happen even if the rest of the market is performing well.
If a company has paid dividends in the past, it doesn’t guarantee they will do so in the future.