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Investments. |
WHAT TO CONSIDER WHEN MAKING SAVINGS AND INVESTMENTS:People like to feel financially secure and know that their money is working efficiently for them. They also like to have a cash reserve to call on. The best way to achieve this is through savings and investments. The old adage ‘’don’t put all your eggs in one basket ‘’makes sense. You will need to consider what your
savings and investments are to achieve and what your personal needs are. Investing is not about gambling or speculation. It is about taking
reasonable financial risks to achieve specific goals. There are many
different reasons for investing and any two people will not have the same
objectives. The level of risk you are prepared to take is an important
consideration for your financial adviser, who will want to establish your views
in advance of any advice. For most people preserving their wealth is as important as
accumulating savings in the first place. It is important not to rely on one
type of asset to provide all investment needs. Your savings and investment
requirements will change throughout life, whether you are building a
portfolio or simply starting your first ISA your objectives and circumstances
should always be taken into account, as well as your attitude towards
investment risk. Existing investments may no
longer be right for your circumstances, older products you invested in could
have changed and no longer represent your current requirements: today’s
diversified holdings can become tomorrows distorted portfolio. Being the recipient of a windfall or inheritance can create investment decisions that have not been taken in the past, preserving wealth for future generations can become important, or the capital may be needed to generate income, different types of investments should be considered, and issues regarding tax efficiency, spreading investment and assets need to be assessed carefully. You should consider whether you are investing for income or growth or a combination of both. When choosing the right home for your money you have to take into account the tax you will have to pay….and we can advise on all of these. An investment portfolio
can consist of different assets, and blending these to withstand different
economic cycles is important…..We can explain the difference, including
the advantages and disadvantages. REVIEWING
INVESTMENTS: When building an investment portfolio, there are two important
considerations. The first is asset allocation, which is concerned with how you
spread your investment between asset types and regions. The second is fund
selection, which is concerned with the decision of which fund managers and
funds to use for each asset sector chosen. Both of these considerations are
important although studies have consistently shown that in the medium to long
term asset allocation usually has a much larger impact on the overall
portfolio risk and return than the individual funds. Your Risk Profile: The level of investment risk you are willing to accept must always be
considered, you may have more to save or capital to invest but don’t
know the best way of doing it, or your circumstances have changed causing
your views to alter. The ‘Level of risk’ can be more accurately evaluated by
using Risk Profile questionnaires, the results can show the degree to which
you are prepared to accept fluctuations in the value of your investments, and
in order to improve your chances of achieving higher long term returns. Your Investment
Objectives: To choose an appropriate asset allocation we need to take into account
your specific investment objectives as this will affect the asset classes
chosen.We
carry out extensive research, explain the jargon and the benefits of
diversification in planning a portfolio. We will take into account your
circumstances, your objectives and how these fit in with your investment
goals. Children and Saving: Bringing up a child is
expensive, all that baby equipment they need, clothes, books, toys, swimming
lessons etc. But that is not including the big expenses, like childcare and
education. Then there’s the cost of university. You will probably
prefer them to start their working life without huge debt….This
requires savings and investments, we can explain the advantages and disadvantages
of different investment options. Manager of Managers or Fund of Funds: A professionally managed
portfolio needs investment skill and analysis not easily available to
everyone, Manager of Managers and Fund of Funds use different approaches to
managing funds, both can often be
appropriate for investors, we can explain the differences and how these vary. WHAT WE DO: Before making any
recommendations we will ascertain you circumstances and goals, take into
account your attitude to risk, and where appropriate complete a portfolio
planning questionnaire to check your views and understanding of different
types of investment and assets and risks associated with them.
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