The world stock markets are going through a pretty rough time right now. In the last month, some of the most important markets have lost an average of 10%. In this article, I talk about how I try to save money in a number of different ways, which helps me spread out the risk, even when the stock market goes down.
About five years ago, I started putting money away regularly. After the terrorist attacks in New York, the stock market in the UK had just taken a big hit. I wanted to build up a kind of emergency fund, so I put my monthly premiums into a unit trust. I started putting away GBP50 a month, and over time, this amount grew.
I have to say that I've been very lucky because my investments have done very well. Over the past few years, I've even sold some of the units to pay for our family vacations. At the beginning of this year, the UK stock market was doing better than it had in five and a half years.
In the five years I've been investing, I've bought a lot of units in this unit trust fund and now own a lot of them. But what it means now is that if the stock market goes through a time like it has been, it will cost me quite a lot of money on paper.
I now think that I have enough exposure to the stock market, so I've decided to keep the units I already have in the fund but not add to them. Instead, I will put my regular savings into one of the online bank accounts for regular savings that pays a high interest rate. This is a way to spread the risk, of course.
I don't know what will happen to the stock markets around the world in the next few months. Many people say that interest rates in the United States could go up, which could hurt markets around the world. There could be another big terrorist attack, which would likely cause the stock market to drop sharply.
I hope that the stock markets will keep going up like they have for the last five years and that the drops in the last few weeks were just a fluke. I just think I have enough money invested and want to start saving in a safer way.
