Future goals

How long you have to pursue each objective

If you’ve got a sufficient amount of money in your cash savings account – enough to cover you for between three to six months in the event of an emergency or unexpected expenditure – and you want to see your money grow over the long term, then you should consider investing some of it.

Risk tolerance

An important part of the investment decision process

There’s no single answer to the question of how much investment risk you should take on. It depends on your individual circumstances, goals and comfort level with risk. Some people are more comfortable with risk than others. Some people are willing to take on more risk in order to achieve their goals. And some people have different tolerance for different types of risk.

Asset allocation

Minimise your risk and maximise your potential return

Investment asset allocation is important because it can help you to reach your financial goals. By diversifying your investments across different asset classes, you can minimise your risk and maximise your potential return.

Behavioural patterns

Shaping the way we invest, for better or worse

Investors should keep things in perspective and not overreact to headlines. Although equities may fall more in the near term, historically market drawdowns due to past military conflicts did not last very long and were mostly buying opportunities.

Pitfalls of market timing

Don’t become distracted by short-term volatility

Trying to navigate the ups and downs of market returns, investors seem to naturally want to jump in at the lows and cash out at the highs. But no one can predict when those will occur. Fortunately, there are a number of time-tested strategies that may help you deal with market volatility. Two of the most prevalent are: invest for the long term, and maintain realistic performance expectations when it comes to returns.

Pound cost averaging

Instilling a sense of investment discipline

Pound cost averaging is an investing strategy that can help to smooth out the effects of market volatility and reduce your overall risk. Investing at regular intervals can be a good idea to help smooth out the ups and downs of the market.

Investment funds

Influencing your investment choices

There are many reasons to invest through a fund, rather than buying assets on your own. At a basic level, investing in a fund means having a fund manager make investment decisions on behalf of the investor.

Unit trusts and open-ended investment companies

Sharing many traits, but also having important differences

Pooled investment funds are usually large funds built by aggregating relatively small investments from individuals. A professional fund manager (or a team of fund managers) determines which assets to invest in and then purchases accordingly. They are also known as ‘collective investment schemes’.

Investment trusts

Seeking value everywhere

An investment trust is a public company that raises money by selling shares to investors, and then pools that money to buy and sell a wide range of shares and assets. Different investment trusts will have different aims and different mixes of investments.