Investment

An Investment is the purchase of a financial product or of something with value to provide profitable returns in the future. Generally it means using money to make more money.

People invest their money with different objectives. Using an advisor will help you to know what all of investment options are. It can be very confusing when trying to ascertain where is best to put your money. Financial advice is paramount here to ensure that you get the most from your money and to ensure that you know exactly what it is you are putting your money into.

Investment choices are generally categorised depending on the level of risk that you are prepared to take. They can also depend on what your tax status is, what other assets you own and the length of time that you are planning to invest for.

There are different ways in which you can invest money you can invest individually into stocks and shares or you ca use ‘collective investments’ which provide portfolio’s of assets which are managed by a fund manager. This allows you to diversify your risk as the investments are spread. For example stocks and shares ISA’s are an example of investing in collectives.

Invest to provide an income or capital growth

You can invest money to provide you an income. If you are retired then investing money to provide you an income can provide you with an income whilst trying not to eat up the capital. You can also invest for capital growth if you are looking to accumulate a sum to be used in the future such as school fees.

Saving Products

Saving products are products that are used to create additional interest. The money often can not be used whilst it is in such an account. There are often penalties for making withdrawals. The amount of interest received will depend on the amount of money invested the term and the company investing it. Saving accounts are generally low risk such as a deposit account. This means that they generally pay a lower amount of interest than an investment. A savings account is generally used if you are preserving money for future use.

Structured products

A structured product is a ‘pre- packages’ investment strategy that is usually based on derivatives. A feature of some structured products is that they have a capital guarantee and can provide enhanced returns. The structured product market is quite complex and you should speak to an advisor regarding them.

Shares and bonds

If you purchase a share( Also known as equities) then you are purchasing a share of a public listed company. A company ‘floats’ on the stock market to enable the public to purchase their shares. Generally if the value of the company rises then the value of your share does. If the company declines in value then so does your share.

Bonds are issued by companies or the government to raise money. When you purchase a bond you buy in to a guaranteed interest rate over a certain fixed period plus the price of the bond. Bonds are traded on the market so that investors can get the best rates of return. The performance of the bond will depend on the companies stability, performance and also economic conditions. You may get back less than you invested.

Collectives

A collective investment is when you invest money with others and therefore can  include  a wider range of investments than feasible for most sole investors, and to share the benefits and costs of doing so.  Please talk to an advisor to find a collective investment that is suitable to your individual needs.

Derivatives

A derivative is an agreement between two parties. Simply they can be thought of as a bet on the price of something. The bet is made by the two parties usually on the performance of a certain financial instrument or underlying asset’s. The different underlying assets can be shares, stocks, indexes, bonds, currencies, commodities or nearly virtually anything. There are benefits of derivatives and also pitfalls which you need to be aware of if investing in derivatives please speak to one of our advisors regarding this.

Investing a lump sum or regular payments

Investing a lump sum means that the whole of the investment is invested. Regular payments means that you invest on a regular basis to accumulate a sum of money that you are happy with.

Inflation

Throughout time the cost of goods and services rise , it is essential if you have savings that your money grows at the same rate or above the rate of inflation. This will ensure that your money is worth the same today as it would do in 10 years time, otherwise the rate of inflation will erode your savings worth.

There are many ways to invest to try and beat inflation, through low risk saving’s accounts to higher risk equity investments. Please speak to an advisor regarding this.

Risk

It is essential to realise what amount of risk you are prepared to take. This will depend on the type of product you are investing in, your age, the purpose of the money, the amount of savings you have and your current financial situation. Our advisors have tools that can measure your attitude to risk and can guide you towards the right investments. Generally the lower the amount of risk that is taken the lower the return and the higher the risk taken the greater the potential for higher returns and losses.

Whole Of market Investment Advice

If you want to get the most out of your money, you could go directly into your bank. They will not be able to advise you on what to do with your money, however they can try and sell you their products.

As advisors who have access to all the financial products on the market we are able to advise an individual on what product has the best returns and is the most suitable for them.

It may be the case that you already have investments but are concerned about different area’s of your investment portfolio, tax planning or inheritance tax. In these case’s our advisors can still help, you do not need to purchase a product to get advice.