Investments & Savings

Balancing risk in pursuit of reasonable return...

Investing, Who Me...

Investing can appear to be both a complex and daunting task to someone who has never had to make a decision about how and where to invest their hard-earned money so that it grows at least in line with inflation.

With thousands of different options to choose from, it can be difficult to figure out what’s right for you. However, relevant information and advice will help you make an informed decision.

So, whether you are a new or experienced investor, these fundamentals should be borne in mind:

  • Having all your money in cash is not a good long term option – over time, inflation will eat away at the buying power of your cash.
  • Investing gives you a way of trying to make your money grow at a rate that’s greater than inflation along with providing a return that’s better than depositing it at a bank or building society.
  • Investments fall into four main categories or asset classes: cash, bonds, property and shares. There are other categories but these are the ones that people are most familiar with.
  • While it is possible to invest in each asset class separately, you do not have to. Investing your money in funds allows you to spread your investment across different asset classes while reducing risks associated with having everything in one asset class.
  • Volatility – the amount by which value of any asset goes up and down – affects all assets, irrespective of class. Funds are fully exposed to the volatility of their underlying investments.
  • Balancing risk and return is something that you must do. Over the long term, investments in volatile assets offer potential for higher returns, however, they are also more likely to be subject to sudden and significant fluctuations in value – sudden falls or rises in value are more likely.

One More Thing...

Just one more thing; set reasonable expectations – whether you’re risk averse or a risk loving daredevil, your attitude to risk will determine what are reasonable expectations for you.

If you are risk averse then you will be comfortable with low-risk investments that are more likely to return the money you have invested and have less potential for growth.

If you are a risk loving daredevil then you will be comfortable with high-risk investments where you may lose some or all of your money but may also have potential for extraordinary growth over the long term.

These are the extremes; most investors fall somewhere in between. Remember, one person’s reasonable expectations are another’s nightmare and it’s always best to avoid nightmares.

Making Sense of It...

While we do not have a crystal ball that allows us to look at the future performance of any investment, we do have 70 years combined experience advising people about investing their money.

We can provide you with the relevant information you need, help you get comfortable with investing, help you measure your true attitude to risk and provide you with advice that will allow you to make an informed decision about how you will invest your money for the future.

Rainy Days & Little Nest Eggs…

Putting a little aside for a rainy day or building up a little nest egg: there are many ways to save for these and life’s milestone events – new car, first home, wedding or perhaps education. Depending on how you wish to save, there are many different savings options available to you.

So, whether you plan to save regularly or have a lump sum, we can help you choose an option that best suits you.

Advice Time?