Investment planning
The expectation of greater reward
Your investment goals and the question of time should determine your investment plan. Generally, the longer it is before you need your money, the greater the amount of risk you are able to take in the expectation of greater reward.
You don’t want to find yourself having to sell just when the price has fallen. If you plan to spend the money soon, say in a few years, perhaps to celebrate an anniversary, or if you are nearing retirement and are planning to take an immediate income from your pension fund, you will want to safeguard the value of your money.
The value of shares can go up and down in the short term, and this is difficult to predict, but long term they can be expected to deliver better returns. The same is true to a lesser extent of bonds. Only cash offers certainty in the short term. Broadly speaking, you can invest in shares for the long term, fixed interest securities for the medium term and cash for the short term.
As the length of time you have shortens, you should assess and consider changing your total risk by adjusting the “asset mix” of your investments. It is often possible to choose an option to “lifestyle” your investments, this is where your mix of assets is risk-adjusted to reflect your age and the time you have before you want to spend your money.
Talk to us about how we could help you to decide what investments are appropriate to your particular situation based on your future goals. Please email or contact us for further information.
For more information or to discuss anything in this article feel free to contact Doug McLean via email or phone.
