Managing investments
Once you have secured your Emergency Fund using cash savings, it may be important to deploy your spare funds (whether as a lump sum or regularly) for the longer term, especially to try and ensure your money keeps pace with inflation – which is the gradual increase of prices over time.
Creating an investment portfolio can be daunting, however there are a few crucial areas which require attention. These include:
The amount of risk you feel comfortable taking with your investments, as well as how much risk you can afford to take; these two are not the same.
What your asset allocation will be, this is how your money is split between different sectors, markets and countries. For example, how much will be in technology, and how much should be invested into Emerging Markets. Having a good asset allocation helps to diversify risk, and maximise return.
If there are any particularly qualities your portfolio should share with you personally; for example if you would like to exclude companies that are perceived to cause harm (such as Tobacco, Armaments, Oil and Gas) or if you would like your portfolio to be focused on companies that promote good Environmental, Social and Governance (ESG) practices.
What tax wrappers should be used to minimise any potential tax liability; for example an Stocks and Shares ISA, a Trust or an Investment Bond.
Overtime your objectives will change; you may go from wishing only to grow your investments to wanting them to provide an income; or to be passed to children as part of your succession planning. Therefore it is important to ensure that your investment portfolio is review periodically to maintain it’s suitability for your current and future needs.
How we help.
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Many people find themselves with a lump sum of capital they would like to invest, we can provide advice by building and monitoring a portfolio based on the amount of risk you are willing to take, your objectives and other assets. This will likely involve the use of an ISA, General Investment Account or an Investment Bond.
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Perhaps a payrise at work, or repaying your mortgage, means you have more disposable income each month. You are able to allocate this to investments on a monthly basis, we can arrange this for you as well as advice around the underlying portfolio.
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If you have held investments for a while, which are not within an ISA, there may be unrealised gains which, if you disposed of the investments, would lead to a Capital Gains Tax liability. We can assist you in calculating these unrealised gains, as well as formulating a plan to manage the liability over the medium and longer term.
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Some, typically higher risk, investments come with tax incentives; including to relax or Inheritance Tax liabilities. If these investments form part of our financial plan for you, we can assess the whole of the market for the best option and implement this advice on your behalf.
