Personal Investment Planning
When presented with the opportunity to invest either a regular monthly / annual amount out of income or a one off lump sum from accrued capital, there are a substantial number of options available to an individual. So much so that the easiest thing to do is to do nothing, leaving it simply to sit in what is often a low interest bearing bank or building society account.
Whilst cash can offer some benefits to investors, and indeed regularly plays a part to a lesser or greater extent in our clients’ portfolios, as a long term strategy this could be considered detrimental.
There are a number of factors that need to be considered when considering an alternative investment:-
- What is your objective and when might you need the funds? – This will revolve around whether the investment is for income or growth, whether access is required, how long are you prepared to invest for and perhaps whether more complex planning is involved, typically Income Tax, Capital Gains Tax (CGT) or Inheritance Tax (IHT) Planning.
- What is your attitude to investment risk? – How risk averse are you and what is your view of volatility? How do you feel about your money reducing in value at times?
- What investment vehicle/wrapper is the most appropriate for my circumstances?
You may clearly be able to answer and elaborate on the first issue. However, with regards to investment risk and to which type of medium you should invest through, these are not so easily determinable. We consider this to be an area where professional and independent financial advice is imperative.
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