We know the importance of earning a return on our money and planning in order to achieve our lifestyle goals, but we may not know how to start an investment program that will put us on the right path.
Your personal investment goals
Your first step as a potential investor is to determine what you want to accomplish with your money, and when you want to accomplish it.
What are the next steps?
Once you have determined your investment goals, you need to establish your tolerance to investment risk and your investment time frame, making sure you keep to your original goals.
Investment risk
Investment risk refers to the flucuation in investment returns that you are prepared to accept, including the potential loss of some of your initial investment in the short term as a result of market movements.
Risk and return are directly related. The higher the level of risk you are prepared to accept, the higher the potential return from the investment. Conversely, this higher level of risk will also increase your chances of incurring a loss in the short term. It is important to invest in the type of investments that are compatible with your investment risk profile.
Investment time frame
Investment time frame refers to the amount of time you have to meet your financial goals and to make up for any losses you might experience.
Investment markets move up and down over time impacting on the value of your investment. If you have many years to invest, you may be prepared to take on more risk in your investment portfolio. If you only have a couple of years to invest, you may want to place your investments in more secure assets.
Keeping to your plan
Your investment strategy should incorporate all aspects of your personal finances over the short, medium and long term. It is therefore important to keep to your strategy to give yourself the greatest chance of achieving your financial goals.
Choosing how and what to invest in is a difficult decision. A qualified financial adviser can help define your unique personal situation and identify an investment option that best suits you.
What can you invest in?
There are four types of investment.
- Cash - includes bank deposits, cheque accounts and cash management trusts
- Fixed Interest - generally includes income-producing assets i.e. government bonds, fixed term deposits and mortgage trusts
- Property - includes residential, industrial and commercial
- Equities (shares) - involves the purchase of a stake or financial interest in a company, enabling you to share in the profits and future growth of that company
At Apex Partners we welcome the opportunity to talk to you about ways we can assist you and your finanical situation. Call us on 1300 856 338 to arrange a free, no obligation appointment.