Your Investment Plan

Whatever your reason for investing it is important to select an investment that suits your needs and objectives. Key elements of your investment plan should include:

Your Tolerance Toward Risk

You will need to understand the risks associated with your investment. Risk is normally measured in terms of the likelihood or probability of your investment achieving an expected return over a given period of time. Returns from lower risk investments tend to be more certain and higher risk investments less certain. Risk is also considered in terms of volatility of return or the expected range of returns that might be expected from your investment over time. With higher return comes higher risk. Your tolerance toward risk can help determine particular investments that may be inappropriate for you. Of course, lower risk investments will likely provide a lower return so there may be a trade-off as to the likelihood of achieving your financial goals.

Investment Horizon

You will usually need to achieve your investment objectives within a specified time frame. This is your investment horizon and could be short, medium or long term. Generally, the longer period you have to invest the more risk you are able to accept since the impact of fluctuations in return or volatility tends to reduce over time. You may still require confidence and steadfast determination in your investment strategy though to brave market downturns.

Need for liquidity

Your personal circumstances can change so before making an investment it is important to consider how quickly you might convert your investment to cash. Some investments are highly liquid while others may provide little or no liquidity. For example it may take up to six months or longer for you to sell a direct property investment.

Structuring Your Investment

The return you achieve on an investment will be subject to tax. It is therefore important for you to consider the potential taxation consequences of your investment prior to investing or changing an existing investment. Consideration should be given to selecting an appropriate legal structure to legally minimise tax. An investment might be best held in your personal name or through a separate structure such as a superannuation fund or allocated pension for retirement monies and a trust for non-super monies.

Diversification

Diversification or spreading your risk across a number of investments is an important part of any well structured investment plan. Incorporating a mix of investments in your portfolio can help to reduce the impact of fluctuations in return from any single investment. You should look to diversify across a number of investments providing an attractive return. Individual investments should be considered in the context of your overall portfolio and financial position.

Ongoing Investment Review

An investment plan is not about setting and forgetting. Once a plan has been prepared and implemented, you will need to revisit it periodically to track progress and to make adjustments when necessary. Fine tuning of your portfolio will ensure it is continues to run smoothly and keep your dollars working hard for you.

How we can help by providing Personal Investment Solutions?

We are able to provide advice on a full range of investments including deposit products, debentures and bonds, listed shares and listed property trusts, managed funds and trusts, wrap accounts and master trusts, superannuation funds, annuities and allocated pensions. If you would like more information on specific investments or advice on how to best structure you investment portfolio simply follow this link: Enquiries