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How to invest money: our investment portfolios

Use Which?'s unique investment portfolios to help you decide how to invest money and grow your savings over the long term. 

In this article
Coronavirus (COVID-19) update  How do I invest in the stock market? How do I buy investments?
The Which? investment portfolios How do I choose investment products? How do I rebalance my investment portfolio?

Coronavirus (COVID-19) update 

The coronavirus outbreak has caused considerable volatility in the stock markets, potentially impacting your investments.

At times like this, it's important not to make any quick decisions when it comes to selling or buying investments. Do your research and beware of investment scams.

You can find the latest updates and answers to your questions in our how to protect your investments story.

You can find out more of the latest updates and advice on our dedicated Which? Coronavirus information hub

How do I invest in the stock market?

Deciding how to invest in the stock market is a daunting task, and one that can paralyse even the most ambitious amateur investor.

Never fear: Which? Money is here to help. 

Here we explain how to build and manage an investment portfolio.

This article is intended for those prepared to take at least some risk with their money and invest for more than five years. If that's not you, you may find this guide more useful.


How do I buy investments?

If you decide to invest without the help of a financial adviser, you can cut the cost of investing by using a fund supermarket or investment broker. 

These are online hubs that allow you to buy investment products and monitor their performance in a one-stop shop.

Because you're doing all the hard work of picking your investment, you won't be paying the fees associated with going through a financial adviser. Cutting these charges can have a significant impact on the performance of your investment portfolio over the long-term.

Some fund supermarkets now offer ready-made portfolios designed for different risk appetites.

We've reviewed all the major fund supermarkets and named a handful as 'Which Recommended Providers'.

The Which? investment portfolios

We’ve built a set of investment portfolios designed to illustrate how you could spread £10,000 across several types of investment, or asset classes, depending on how much risk you are willing to take on and how much growth you hope to attain.

You can find a full list of asset types and associated risks here.

Each different type of investment carries a level of risk. The riskier the asset, the higher the potential return - and greater the potential loss. 

If you’re already invested, take a look to see if the portfolio best suited to you matches the make-up of your existing portfolio. It’s possible you could be taking on too much or too little risk without realising.

We've given our portfolios a spicy theme - the hotter the chilli, the riskier your portfolio is going to be.  But those riskier portfolios also have more potential for growth.

These portfolios don't constitute financial advice, but can act as a helpful starting point for a conversation with a financial adviser

The portfolios are built for long-term growth - you'll need to invest for at least five years - and not designed for those looking to get an income from their investments. 

How do I choose investment products?

The next step to take once you've decided on your ideal portfolio will be how to populate it with actual investments.

The easiest way of doing this is through investments funds, such as unit trusts, open-ended investment companies (Oeics), investment trusts and exchange traded funds. 

They're cost-effective, and allow you to further spread risk, compared to investing directly in shares. Remember, the management costs of your investments can have a big impact on their performance. 

We suggest you use low-cost tracker funds to fill up your portfolio, although some assets, such as property, may be better suited to higher-cost, actively managed funds.

How do I rebalance my investment portfolio?

You'll need to re-assess and rebalance your portfolio annually. Rebalancing is the process of bringing your portfolio back to its original asset allocation. 

This is necessary because, over time, your investments may fall out of sync with your original asset allocation; this tends to happen when one asset, usually equities, grows more quickly than the others.

For example, if UK equities represent 20% of your portfolio at the beginning of the year, but have grown in value to represent 30% at the end, you'll need to sell some of your UK equity holding and purchase more of an asset that's underweight to get back to your original allocation.

Try to resist the temptation to tinker with your portfolio, and rebalance after six months or a year. An increasing number of fund supermarkets now offer smartphone apps, but these can increase the temptation to tinker.

The Money Advice Service has some advice on assessing the performance of your investments, although this should not be taken as financial advice.