We all have different attitudes toward investing risk.
Firstly, you need to think about what you want to save or invest for – what is your goal. Then, think about how comfortable you are with the possibility of losing money, what your time frames are and how you emotionally deal with volatile returns.
For example, how would you feel if your investment was to fall by 5%, 10%, 15%, 20%, 30%, 40% or more than 50%!
Your attitude to risk can influence your investment strategy as much as your financial circumstances. This is a decision that is very specific to you but it is an important one as you want to able to sleep at night.
If you’re not sure what sort of investor you are, our online risk profiler tool can help you understand more about investment risk and what levels of risk you feel comfortable with.
Based on your answers, your financial circumstances, time horizon and your investment goals we can also suggest some funds that maybe suited to you.
Everyone should be diversified!
For many investors a key ingredient to successful investing has actually been diversifying your investment.
This essentially means spreading your investment over a range of assets so that no one asset type has a significantly large influence on the overall return. However, over the longer-term you really need to have as much money invested into growth assets as possible.
This involves a trade off between risk and reward. The impact of this is highlighted in one of attached blogs – where we look at investment returns compounding at 6% per annum versus 2% per annum for a pension investor.
The differences are quite significant.
We have access to the widest range of investment solutions available
A wide range of investment solutions is available today that can help you diversify and share in the rewards of investing. Options are available from very low risk to very high risk.