Remember when you looked forward to your salary rise, and even built it into your plans to pay off you home loan?

Been a while since that happened, right? Perhaps these days you just feel you always seem to be getting poorer.

Figures released this week show wages growth at a record low rate of under two per cent – half of the rate of growth two years ago.

Once, bosses would be happy to hear this, saying it allowed them to invest in more staff. But while unemployment is stable, it isn’t rising.

Less than two per cent hardly matches increases in the cost of living. And even if families did have a little left to save, interest rates are so low it hardly seems worthwhile as an investment.

So how is anyone supposed to get ahead in a market in which everything, and everybody, seems to be treading water?

Nothing beats diversification, according to financial adviser David Reed of advice firm SmartRetirement.

“Whilst popular economic opinion forecasts a low return environment for the short to medium term, diversification of assets remains a crucial strategy for investors to capture potential earnings,” says Reed.

He says that assets like bonds, shares and listed or residential property often move at different times.

With investing, says Reed, there is no magic bullet, just perseverance and commitment which is not always glamorous, but pays off in the long run.

There is one opportunity that Reed points out – borrowing from a bank or financial institution to kick-start an investment portfolio.

With loan costs also at an all time low, it could be a chance to start a portfolio ready for an upswing.

Of course, if security is an issue, you need to understand margin loans secured against your portfolio. See Should you borrow to invest in shares.

“This is all dependent upon your risk tolerance and suitable strategies for your personal goals,” says Reed.

He points out you can also simply contribute monthly savings into a low cost index fund or exchange traded fund.

These offer broad diversification and exposure to different overseas markets and also commodities.


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