INVESTMENTS

Building a secure future is important to most people. We understand that everyone has different views on how they wish to invest and what level of risk they are prepared to accept. That is why we offer an investment review service that can look at your existing investments and compare them with your short-, medium- and long-term goals.

As part of our investment review service, we consider the timescales during which access to cash may be required, as well as attitudes towards different forms of risk and whether some forms of investment may be unacceptable. It is no longer necessary to sacrifice principles in order to secure a reasonable investment return.

Asset allocation is an important aspect of investment planning. It is, perhaps, intuitive not to “put all your eggs in one basket”; however, the principle that picking the right mix of asset types is more important than individual ‘stock’ selection is based on research undertaken in the US in the 1990s.
 


Text Box: Investment risk comes in a number of formats, including:  •	Volatility – that the value of investments falls just when access is required;  •	Relative underperformance – that investments perform less well than alternatives which could have been considered;  •	Absolute underperformance – that the value of investments will fail to keep pace with inflation;  •	Loss of capital – that you will get back less than you invest, possibly nothing at all.  In general, risk increases in line with higher potential returns.

In simple terms, by spreading your investments correctly, you will always miss out on the maximum growth of any one asset class. Since this can only be seen in hindsight, however, it is generally safer to allocate your investments more widely so that you partially benefit (or suffer) from the gains/losses of each category. This can often produce better overall returns than a few lucky guesses.
Only once consideration has been given to asset allocation will tax wrappers such as ISAs and pensions be considered. Tax benefits are of little value if investment returns are poor!

The value of investments is not guaranteed and will fluctuate. You may get back less than you invest.