TIME TO DEFINE YOUR INVESTMENT GOALS?
Before you can actually define your investment goals, you need to ask yourself what you want to achieve. If you would like to get a sound point of view about what may be right for your unique situation, please contact us.We’ll review and discuss your financial situation, help you set goals and suggest specific next steps, discuss potential solutions, and provide ways to help you stay on track.
Risk is the possibility of losing some or all of your original investment. Often higher-risk investments offer the chance of greater returns, but there’s also more chance of losing money. Risk means different things to different people. How you feel about it depends on your individual circumstances and even your personality.your investment goals and timescales will also influence how much risk you’re willing to take.What you come out with is your ‘risk profile’.
As a general rule, the more risk you’re prepared to take, the greater returns or losses you could stand to make. Risk varies between the different types of investments. For example, fundsthat hold bonds tend to be less risky than those that hold shares, but there are always exceptions.
You can’t get rid of risk completely, but you can manage it by investing for the long term in a range of different things, which
is called ‘diversification’.you can also look at paying money into your investments regularly, rather than all in one go.This can help smooth out the highs and lows and cut the risk of making losses.
DIVERSIFICATION - WHAT DOES IT MEAN?
Just as a balanced diet is good for your health, holding a balanced, diversified portfolio can be good for your investments. diversifying your portfolio with a mix of investments can help protect it from the ups and downs of the market. DIFFERENT types of investments perform well under different economic conditions. By diversifying your portfolio, you can aim to make these differences in performance work for you.
The idea is to put your money into lots of different things so that it’s not all tied up in one area. If you hold the shares of just one company and it collapses, you could lose all your money. If you invest in a particular sector that performs poorly – like the banking sector in 2008 – you could find yourself with heavy losses.
Of course, even well-diversified portfolios are at risk from market movements.All investments can fall as well as rise. But a portfolio that’s diversified will generally move less and produce more balanced returns – both gains and losses.
Diversify your portfolio in a few different ways through funds that invest across:
- different types of investments
- different countries and markets
- different types of industries and companies
A diversified portfolio is likely to include a wide mix of investment types, markets and industries. How much you invest in each is called your ‘asset allocation’. diversifying your portfolio requires investing in more than just one company.
It means introducing investments from different countries, different sectors of the same market and different asset classes so they behave differently in response to market conditions over the medium to long term.