The second important aspect to equity investment is time; the time to make sure your money has a chance to grow in the first place and then the ability to defer withdrawing your money if something happens suddenly in the market that causes prices to fall.
Most experts suggest that an investment in the stock market should not be undertaken unless you have at least five years to go before you will need the money. Assuming that in any one year, shares will outperform your building society account is wrong. However, as your timeline extends, the possibility that it will outperform increases.
Of course, if we could all predict which years would be the best in the market and which would be the worst, there would be no issue with time. But we all know that is impossible.
Past performance is no guide to the future. The value of investments can go down as well as up and you may get back less than you invested.
When investing internationally changes in currency exchange rates may affect the value of an investment. Smaller companies and emerging markets carry higher level of risk than larger, more established companies and markets. Consequently, the suitability of any particular stock market investment depends on your personal circumstances and your attitude to risk.
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