Our approach uses specific principles to construct client portfolios.
Investment is about putting your money to work now to provide a source of income and / or capital for the future. Most individuals invest in order to generate a profit or positive return over reasonable time frame. The higher the return generated by an investment, the greater chance you have in achieving your financial goals.
In the past, investors have been encouraged to invest in specific products or funds that promise high returns over the long term.
These may not be suited to your circumstances or take account of your risk preferences, and can result in disappointing returns.
Investments inevitably carry some form of risk and understanding your tolerance for risk is therefore important in the financial planning process. When disappointing returns occur, it’s natural to respond cautiously. This may result in selling an investment at the wrong time. More damagingly, it can discourage investors from investing in the future.
To avoid disappointment, it’s common for investors to remain heavily invested in cash. However, cash itself is not risk-free. While the capital value may be secure (subject to the criteria of the Financial Services Compensation Scheme limit, ask us for details), it is easy to overlook the impact of inflation over time, which reduces the purchasing power of each pound. In fact, investing in cash may also lead to long-term financial disappointment because savings rates tend to be lower than inflation, meaning prices rise faster than the value of your savings.
In order to invest successfully, you need a clear understanding of your goals. We can then help you to establish an investment portfolio that will give you the best chance of achieving those goals, at a level of risk you are willing and able to accept.
To be comfortable making important investment choices, it is vital you understand investment principles and the concept of risk and return.