RAFTERS ASSOCIATES FINANCIAL MANAGEMENT LTD
Do you know how much risk you are prepared to tolerate when you invest? This is the question that lies at the heart of investment planning – and very often the discussions about risk take the longest. The basic investment choice is between the following asset classes: cash; fixed interest securities, equities and property.
These are the building blocks of investment portfolios. Your risk profile – how much risk you can and should be prepared to take on – will help determine the appropriate mix of these basic components in your portfolio, usually called the asset allocation. There are several other factors to consider such as how investments are taxed, and the choice of fund managers and institutions, which can make a substantial difference to your returns, but asset allocation is almost certainly the key decision.
Investment planning and asset allocation
Investment planning is now more of a science than an art. Technology, ever increasing investment opportunities and stricter regulation have all encouraged a more scientific approach. But has your investment strategy kept pace? Asset allocation is often thought of as the key to achieving investments returns: an average fund in the best-performing sector is frequently a better choice that the best fund in an average-performing sector.
Investing for children
Most parents want to help their children financially, whether it is making sure there is enough money for their education or helping them to buy a property. An early objective may well be to help children understand the value and importance of money. Tax will be a major factor to consider, as will the risks of giving children too much too soon. It is therefore important for parents and others to appreciate the basic tax and legal rules and also some of the investment products that are suitable for their children.
Investing in VCTs and EISs
Over the years, governments have introduced, and then replaced, a variety of schemes to stimulate investment in new and small businesses. A key feature of all of these schemes has been various types of tax incentive. Before embarking on investment in any of this trio, it is crucial to understand the constraints that surround them, as well as the potential rewards.
Making the most of ISAs
When Individual Savings Accounts (ISAs) first appeared in 1999 as a replacement for PEPs and TESSAs, they were a relatively straightforward offering. In the 18 years since, what was once simple has become more complicated but all ISAs have a number of features in common.
Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.
Past performance is not a guide to future performance. The value of investments and income from them can go down as well as up, and you may not get back the original amount invested.
Levels and basis of, and reliefs from, taxation are subject to change and depend on your individual circumstances.
This publication is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The Financial Conduct Authority (FCA) does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. This publication represents our understanding of law and HM Revenue & Customs practice as at 31 October 2018.