Consumer advocate Martin Lewis has emphasized that Britons are overly cautious when it comes to taking risks with their finances and encouraged them to consider investing to maximize their returns. In a recent episode of his ITV show, the Martin Lewis Money Show Live, Lewis highlighted the importance of investing for beginners, pointing out that savings alone may not be sufficient due to their diminishing value compared to inflation over time.
Lewis stressed that investing offers the potential for greater growth, especially for long-term financial goals. He aimed to educate viewers on the basics of investing to empower them to make informed decisions about their money. Regardless of the amount individuals have to invest, Lewis advised approaching investing with a realistic understanding of its uncertainties and the absence of guarantees.
Guest speaker James McManus, chief investment officer at JP Morgan Personal Investing, emphasized the importance of viewing investing as a long-term commitment, recommending a minimum investment horizon of three to five years, or even up to three decades. Lewis explained the concepts of stocks, shares, bonds, and the differences between investing in individual companies versus diversified funds.
He cautioned against inexperienced investors buying individual shares and advocated for diversified funds to spread risk. The show also covered active versus passive funds, highlighting the benefits of index-tracking funds. Lewis illustrated the potential growth of investments over time, emphasizing the superior performance of funds compared to traditional savings accounts.
While discussing the tax advantages of investing in stocks and shares ISAs, Lewis also warned viewers about the risks of falling victim to investment scams and the speculative nature of cryptocurrencies like Bitcoin. He urged caution and advised only investing money that individuals can afford to lose.
In conclusion, Lewis’s message centered on empowering individuals with knowledge and understanding to make informed investment decisions that align with their financial goals and risk tolerance.