Why Invest?
Every investment carries an element of risk. The global financial crisis has brought many of those risks into sharp focus for many investors, who will have seen the domestic housing bubble burst, volatility on stock markets and high inflation coupled with low interest rates on cash deposits. This situation has understandably caused a lot of concern and left people wondering how they can achieve reasonable returns without worrying about the amount of risk they have taken on. So, how can investors do this? Because investing is such a complex activity, it is vital to get suitable financial advice – which is where we at Principle First can help.
Investment risk & return
A basic principle of investing is that over the long term, the more risk you take on as an investor, the more return you can expect, and correspondingly the more cautious you are, the less return you can expect. Investing is a deeply personal activity, and everyone has a different attitude to it, so it makes sense to invest in a way that suits your own ‘attitude to risk’. The first step therefore is to find out what yours is.
Do your investments match your risk profile? Speak to one of our advisers on 0800 678 5929 who can assess your attitude to investment risk.
Given that risk cannot be avoided altogether – even with cash deposits – strategies are needed in order to minimise it. The foremost of these is to diversify, and thereby avoid having ‘all of your eggs in one basket’. The idea of investing in a diversified portfolio is that if one part of it loses value due to a movement in the market, another area will perform better and maintain the balance of the overall portfolio. Portfolios can be diversified across investment types (typically ‘asset classes’ such as company shares, fixed interest investments, cash and commercial property), sectors of the economy and countries.
Most investors do not have the time, resources or expertise to produce their own diversified portfolio, so the way to get a portfolio that is suited to your attitude to risk is to invest in collective investments, or funds. These investments (often referred to as Unit Trusts, OEICs or Investment Trusts) will invest in a spread of diversified assets and be overseen by a dedicated fund manager who is tasked with maximising the fund’s performance. The manager will use a range of investment strategies in order to achieve the fund’s objectives, and a well-managed fund can potentially outperform the market. At Principle First we have a range of fund portfolios to suit different levels of risk. You can see how our portfolios have performed relative to the FTSE All Share index. Past performance is no guarantee to future returns.
There are other personal factors that determine how you make investments, which is why it is important that you obtain suitable advice which takes into account your specific financial circumstances. Call us today to speak to one of our financial advisers or make an investment enquiry.
Investing for Growth
After assessing your risk profile and other personal circumstances, we will make recommendations based on our research. These recommendations will incorporate all of your investment objectives, and will strive to find the correct balance of risk and reward for you. We will also evaluate your investments on an agreed date at least once a year to ensure that your funds are invested in the optimum environment for your personal circumstances.
Investing for Income
For those investors that require an income, we can develop a portfolio that will provide a suitable income from your investments whilst keeping risk to a level that suits you. There are many different products that suit income investment. We will make sure that you are able to do this in the most tax efficient manner.
Guaranteed Investments
Due to the volatility of investments in the last 5 years, more and more investors prefer to have a guarantee attached to their investments, especially those clients nearing, or in, retirement. We continually analyse the various different guaranteed products on the market place, and offer the products to clients that we believe are the most beneficial to their needs.
Saving in Investment Funds
While investment funds are primarily designed to serve those wishing to invest larger amounts as a lump sum, many also facilitate regular contributions through savings schemes. Your financial adviser can advise you on how to access products such as those above, on a monthly savings basis.
Review your Existing Investments
If you have existing investments, we will assess all of your existing pension and investment funds, and provide you with feedback on them. Good investment planning is determined by the methods in which you collect and assess data, and we would be delighted to show you how we do this. If you have existing investments that you would like us to review then contact Principle First today and get a free investment review, which will include comparisons and recommendations.
Regular Investment Portfolio Reviews
Regular reviews of our clients’ investments are a key part of the service we offer. Your personal circumstances and financial requirements inevitably change over time and your investments need to reflect this. Financial markets and opportunities are also changeable, and fine-tuning your portfolio in response to changes in the market is essential in maintaining balance and maximizing returns. Periodically new products come onto the market which may be suitable for your financial aims and objectives, and we endeavour to keep you updated on such developments.
Call us today to speak to one of our financial advisers or make an investment enquiry.
