Risk Versus Reward, that old chestnut…
So. have you got some money that you have saved, inherited, won or some such? Would you like to invest it for some growth but a)have not a clue where to start b)have no faith in products that simply dont do what they say on the tin c)dont trust banks and institutions who have not cast themselves in the most glowing light possible and d)are scared of risking your capital?
But equally, are you, as are many, sick of the paltry returns available in building society and bank accounts and even the highest earning ISA cash vehicles? Who could blame you. Interest rates are and have been historically low for a significant period of time now which is great if you have high debt levels or a mortgage but not so good if you are relying on such rates to provide you with a return on your money. Banks really have gained the reputation of being more self-serving than customer orientated and there is an absolute myriad of schemes available.
Right, let’s strip all emotion and interpretative opinion (aka guessing!) from the environment and let’s apply a totally logical based approach. First step, establish your wants. Often people when asked what they want financially from life reply with an answer that involves LOTS of money, fast cars, riches and possessions etc… However, if they are then challenged to get introspective in relation to this question and really think about it, i.e. do they really want 10 million quid etc…, they often conclude that they would be financially happy with say, a picturesque cottage with a nice garden in the country and naturally no mortgage. In fact, when they consider their authentic and genuine wants, the often discover it is much more achievable than they at first imagined as opposed to those unrealistic and often, unnecessary aspirations.
The conclusion of the first step then, is to have a clear view of where you are going and what your aim is. This does not have to be rigid and inflexible and you can modify your intents at will. But without at least some idea of what you want and where you want to go, then how can you possibly plan the route to take you there? It wont matter later if you take a diversion periodically, life is fluid, not static and unmoving. You never cross the same river twice! (Heraclitus).
The true can be said of your investment goals. Why are you accumulating capital, what will you ultimately use it for? School fees? Better retirement? Holidays? etc… And how much will you need for your pre-defined ambition? Once this is established, you can then turn your attention as to how best to get to your desired end.
In terms of lump sum investment, though frankly, the following principle applies to a whole raft of scenarii, the next step is to establish your risk profile and your attitude to risk generallly to ascertain how much rish your are prepared to countencance to fulfil your desires.. There is no point embarking upon a journey that will find you sleepless every night worried about the outcome.
This is where I would enter the arena; we would have a very open, robust conversation about your wants. Then I would have you complete a psychometric assessment which comprises a number of questions the answers to which would allow me to allocate to you your own personal risk levels. Upon determining the level of risk with which you are comfortable, I would then select a fund of funds that is in keeping with your own personal risk allocation and that would invest across a whole range if diverse sectors and assets.
This method of investing is based more on your own sentiments than individual stock picking although naturally, we could do that too if you were so desirous. In short, there are ways of exposing your money to some stockmarket growth whilst having a very firm grasp on the levels of exposure with which you feel comfortable. We would have 6 monthly reviews to ensure that all is in order and assess your then risk levels and also monitor the performance of your portfolio and we would ensure we chose, collaboratively, the tax environment that you want, the asset classes and allocation that you want and a charging structure with which you are happy.
I believe in a system of total transparency and collaboration with you, since it is vital, VITAL, that you understand precisely what you are doing and I am absolutely happy to enlighten you should you be currently lacking illumination. And the truth shall set your freeeeeeeee! (John 8:32 though later plagiarised by Jim Carrey…)
Give us a call. No commitment, no pressure, no massive overheads!!