Investing for your future
A Financially Well Organised investment strategy should be centred around preserving your capital and aligning with your goals and attitude to risk. The key to investment planning is understanding the trade-off between risk and reward.
Risk can be thought of as the difference between the expected return of an investment and the actual return. There are many types of risk that relate to investment strategy such as inflation risk, market risk, economic and political risk, legislative risk, and so on. One way to manage risk is to diversify your investments. For proper diversification, investors should select a variety of investments within the major asset classes (e.g. cash, property and shares). Another aspect of risk management is how long you’re prepared to wait for a return.
Watch the below video to hear about the role attitude to risk plays when making investment decisions, as well as key investment principles to keep top of mind while planning any investment strategy.
A final consideration is liquidity. When new market opportunities arise you may want the ability to take advantage of them. Having a portfolio that quickly allows you to convert assets to cash will provide you with this important flexibility.
We have prepared a brief Investment Plan resource guide to provide you with further detail on a number of key considerations. The guide discusses the ‘Risk versus Return equation and the guiding principles of diversification and accessing capital.
Invest today, secure your tomorrow.
The 10 key elements to becoming Financially Well Organised
When you have a clear strategy for each of the elements, you will be Financially Well Organised and you too can have peace of mind your financial affairs are in order.
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