Investment Advice you can depend on

What does investment mean to you? The idea of ‘investment’ can mean different things to different people. For you, it may mean something like “making my money grow” or “getting a decent income from my capital”. Those may seem like simple ideas but, in a world of low interest rates, achieving an investment return that meets your expectations may prove challenging.

Regardless of the wider economic backdrop, generating good investment returns has never been a simple matter.

What to do with your money

Knowing what you want to do with your money is the key starting point for your investment plan. As with any journey, you can only plan your route map after you have decided upon your destination. Your goal might be to build up a capital sum that you can access at a pre-determined point in the future, or to produce a certain level of income after a set period of time. Thinking about your goals – there may be more than one – will influence your investment strategy.

If you think the objectives you’ve set are likely to change, be clear about this up front. We can then build the appropriate level of flexibility into our recommendation. Once you have agreed your objectives with us, you should keep to them unless circumstances force a change. While altering your destination mid-journey may not cause problems, you could find that you have been heading in completely the wrong direction,
wasting time and money.

To help you create the right portfolio of investments, we will work systematically through a series of questions.

These are likely to be:

  1.  What are your investment objectives?
  2. What level of risk are you prepared to accept and what potential level of loss can your finances tolerate?
  3. What types of investments should you consider in light of your objectives and risk profile
  4. What is the most tax-efficient way of holding these investments?
  5. How should your portfolio be managed on an ongoing basis?

Apart from the first two questions in the list, which can be tackled in the opposite order, the questions should be addressed sequentially. This is because each set of answers relates to the next set of questions (eg. your attitude to risk will influence your investment choices).

Your answers will prompt further, often more detailed, questions that will help us start shaping your plan.

Helping you achieve your goals
With so many complex, uncertain variables out there that could potentially knock your investments off-track and jeopardise your objectives, it’s wise to seek guidance from a qualified professional. That way you’ll understand the ‘bigger picture’ and have a better chance of achieving your investment objectives.

Before you select an investment strategy or product to help you meet those goals, there are typically a number of steps you will need to go through. The aim of this considered approach is to help ensure the investments you select are those suited to your situation.


Establishing your attitude to risk

Risk is a short word, but it is a major factor in deciding how – or even whether – your investment goals can be achieved. When investing you face a potentially wide variety of risks, including:
• Market risk: This is the general risk resulting from the political and economic environment, which ultimately drives the valuation of investments.
• Inflationary risk: The risk that inflation will erode the buying power of your investment. This is a major risk with all deposit based investments in a low interest environment, or any investment that may have fixed interest, such as bond related funds.
• Regulatory risk: The risk that regulations could change, reducing returns available on your investment. A good example is the utility sector, where companies’ earnings are largely dictated by regulatory decisions.
• Event risk: External events – be they political, social or natural – have the power to alter investment values almost instantly and they can be completely unpredictable.
• Currency risk: If you invest in foreign markets or currencies – or UK companies exposed to foreign markets – your returns are likely to be influenced by the relative performance of the pound

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.