What sort of considerations should I bear in mind when creating an investment portfolio?
To ensure that you are comfortable and happy with your investments, it is very important that you remain resolute and create the right portfolio for your needs. For the risk averse amongst us, it is the classic “sleep at night” test with the goal to create a portfolio that doesn’t give you sleepless nights.
Obtaining the advice of a qualified investment advisor is vital. After discussing your own thoughts and requirements with them, you’ll be advised on the best course of action to take and then provided with tailored investment advice going forwards.
So what sort of things should you be considering?
- Investment experience – are you entirely new to investing or are you experienced and confident in your abilities? How long have you been investing? Do you have a better knowledge of some asset classes than others? How much advice do you require?
- Risk profile – are you conservative and wanting to preserve your capital or are you happy with a greater degree of risk in an attempt to maximise returns? Perhaps a bit of both?
- Investment objectives – what are you aiming to achieve from your portfolio? Do you need to generate income or have access to liquid (i.e. readily realisable) investments? Is capital preservation and/or growth at the top of your priorities?
- Personal circumstances – Is your portfolio part of your retirement planning? Do you have dependants? What are your other assets and earnings?
- Portfolio “Likes and Dislikes” – do you require investments in a particular currency? Do you have your own opinions on particular sectors or companies? For example, perhaps you would prefer “green” investments or avoid tobacco companies for ethical reasons.
There is no right or wrong answer; be open when you speak to your advisor and you’ll be advised on which investments are right for you. Suitability is a buzz word in our industry and quite rightly so.