Who might benefit from this page?
- Individuals with existing long-term investments or deposits
- Individuals looking to make investments for the first time
- Trustees or Powers of Attorney looking after money for others
- Individuals wishing to have their finances managed
Making investment decisions whether for new investments or existing holdings can be a daunting prospect. The shear number of investments or accounts on the market is huge as is the level of financial information which is available. Whilst valuable, this information can be confusing to the smaller investor or those without experience of financial markets.
By following a logical series of steps it is possible to identify suitable investment strategies and pursue them using competitive and flexible products.
What benefits can be gained?
By understanding how an investment portfolio is constructed to meet your exact requirements for capital growth, income or growth and income in the context of capital risk verses potential rewards the following benefits arise:-
- An understanding of the portfolio building process will alleviate the likelihood of inappropriate investments being selected.
- The behavior of the investment is less likely to surprise you, be it in relation to capital fluctuations or varying levels of income.
- Informed decisions can be made regarding levels of exposure to risk be it zero risk or highly speculative.
- Establishing an efficiently constructed portfolio should deliver higher potential investment returns for lower potential risk.
In this factsheet we show the required steps and where impartial advice can help you through them. And, as we will see, it doesn’t just stop once your money is invested.
Investment Management – Four Stage Process
Whether your investment objectives call for the security of cash deposits or you are looking for a more adventurous approach, at Davisons we employ a similar four step process to devising a suitable strategy:
What about cash?
The process outlined above is equally valid if your investment needs would be met be cash deposits. The decline of the traditional building society, the rise of online banking and the results of the credit crunch has changed the savings landscape considerably. Low base rates mean that many accounts are paying little interest and shopping around for rates has become more important than ever.
- Identifying needs correctly will show whether opportunities to increase rates using fixed terms and rates can be used.
- Considering the wider situation, using available allowances and spreading the tax burden between spouses are just some of the methods of maximizing the returns.
What actions can be taken?
Before making a new investment or when reviewing a current one you might want to ask yourself the following questions.
- Do you have a clear idea of what you want from this investment? Is it income, growth or both?
- How will the returns from this be taxed and does that suit your situation?
- Does making or keeping this investment mean that you hold a lot of your money in one type of investment?
- How can you compare this account or investment with others on the market?
- How often do you want to review this investment and is that appropriate for the type of plan you have?
- Do you have an overall strategy for your savings and investments?
- Are my savings and investments being managed cost effectively on your behalf?
How we can help
- Our investment service will always follow the four step process.
- You can choose the level of ongoing review you feel is appropriate.
- We can liaise with your tax advisers and other professionals to ensure your investments work with your wider situation not against it
- We provide recommendations that cover the majority of the investment market from cash deposits to offshore investment funds
- We provide a “cash management service” which can identify and review your cash holdings to ensure that they remain competitive
- We do not have to set up investments to provide on going management and service.
- We can manage your investments to provide targeted levels of income and/or capital growth.