This week our reader wants to know how they can invest to support British businesses.

Reader question:

I have inherited about £250,000 from my mum, who passed away recently, and want to invest my money for the time being so that I can use it to help my children when they buy their own homes.

I know she was really keen to support British businesses so I wonder if I should invest only in them, rather than overseas businesses.

What British investments do you recommend?

Julian Bradshaw of Smith & Pinching responds:

We are regularly asked questions like this, and understandably so: people want to know where to invest their money.

However, before we can say what is best for you, we need to get to know you and understand more about you.

It’s really important you have your money invested in a way which is right for you. How much risk are you comfortable with? What time period are you investing over? What other assets do you have already? Can you afford potential losses? What is your tax position?

These are just a few examples of the things which need to be considered, and it takes a skilled Financial Planner to guide you through to your desired outcome in a way you can understand and are comfortable with, while avoiding the unintended consequences of making the wrong decision.

Something to seriously consider is diversification, or what many people know as “not putting all of your eggs in one basket”.

If you were to invest solely in British companies and they all did well together, you would be very happy.

However, if they all did badly together, you would suffer the full force of their losses. Investing across a range of different investment types, geographies and sectors offers you better protection against losses as you don’t have all of your money in one area.

Also, looking at the top 100 UK companies as an example, a large proportion of their earnings come from overseas.

Our Investment Team makes sure we know what is under the bonnet of the things we invest into on behalf of our clients.

Independent Financial Advisers will give you access to the whole market, while today’s Investment Platforms allow you to hold many different investments together in one place, giving you the best of both worlds – access to a broad range of investments, with the ability to see them easily together in one place.

I suggest you meet with an Independent Financial Adviser to discuss this further. Your adviser will be able to recommend a suitable strategy for you which reflects your investment preferences and starts the journey toward your Financial Planning goals.

Any opinions expressed do not constitute advice. The value of your investment can go down as well as up.

The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.