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Portfolio management

How much risk are you willing to take with your investments?

You must know how much of a risk you are prepared to take before you invest.

In order to determine the size of your investment’s return, an asset class to invest in must be decided, the main options of class are:

  • cash deposits in banks and building societies
  • fixed interest securities (which are loans to the government or businesses)
  • commercial or residential property
  • equities (which are shares in companies listed on stock exchanges)

These classes are the building blocks of your investment portfolio.  We will create a risk profile which determines how much risk you are prepared to take with your investment.  After we have completed this, we will help you to determine the best mixture of the asset classes for you by creating the basic components of your portfolio, this is usually called your asset collection.

In theory at least, the market rewards those who are prepared to take the highest risks by generally providing the highest returns.  Equities, for example, have usually outperformed other asset classes.  But investing in equities can mean a bumpy ride and you will need to spread your investments over different companies, industries and markets to reduce the risk.  If you can afford to take a longer-term view, you can probably afford to accept higher risks.

Although the asset allocation is your key decision, you must also consider other factors such as how your investments are taxed, your choice of Fund Managers, along with which provider you choose to invest with.

Tax is not generally the most important aspect of investment planning – but your investment returns can be greatly affected by your tax strategy, so it is well worth taking tax into account.

Your David Allen adviser will work with you to construct an appropriate portfolio based on your views and personal circumstances. We will ensure through regular reviews that this strategy is maintained and kept up to date.  Reviewing your portfolio regularly is vitally important as investments can quickly become unbalanced and potentially leave you exposed to excessive risk.  Our approach of building a long lasting relationship built on trust ensures we work with you both now and in the future to help you realise your financial goals.

For more information call our team.