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Specialist investment firms can assist you not only to improve returns but reduce the investment risk that exists within your current portfolio. It helps if you know the basics of investing yourself. There are a number of key points that you should establish at outset.
What are your short, medium and long term objectives? You need to be sure that you are investing over the right time frame, so divide your investment monies up accordingly. Your portfolio's asset mix should mirror your goals at any point in time.
That key to long investing is ensuring you have the right mix of cash, bonds, uk equities, overseas equities and property investments. Getting that right is fundamental to any portfolio design.
Setting the right investment strategy is important, getting it right is likely to mean thousands of pounds more for you in the future.
You manage your investments yourself or you could engage an investment specialist to do this for you.
Create a portfolio that fits your requirements. Having a portfolio management specialist working with you would enable you to put together a portfolio that is bespoke and ensure that your asset mix fits your investment personality. Part of this process would be to determine your risk profile and then match this to portfolio, in addition they would take into account any specific requirements you have for cash on certain dates.
Setting the right type of asset allocation strategy. This could be passive asset allocation, a method that establishes a proportional combination of assets based on expected rates of return for each asset class. For example, if stocks have historically returned 10% per year and bonds have returned 5% per year, a mix of 50% stocks and 50% bonds anticipated return would be 7.5% per year. Or you might decide on a more active asset allocation strategy.
You don't have to deal with administrative tasks. Most portfolio arrangements nowadays significantly reduce time spent on administration of investments. This allows you and your adviser to focus more time on investment planning.
You can leverage a proportion of your investments. A professional adviser is likely to advise you to include investments trusts within your portfolio. These can often be bought at a discount to true value. Therefore over time this would have the effect of increasing your returns.
So, if you're thinking about choosing an investment specialist, with current market conditions, now is as good a time as any.
Ray Best provides wealth creation tax planning, and corporate planning for corporate and private clients through his business Pareto Lawrence. Ray Best is a published author in tax advisor magazine, and has published a number of books including Partnership and Shareholder Protection, Inheritance Tax My Way, Inheritance Tax Simplified (new).
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