Cornwall LivingIssue #64

An evolving investment strategy

In the same way that your lifestyle will change over the years to reflect your differing needs, tastes and wealth so might your attitude to investments. This month, Matt Begley is on hand to help with a strategy for the future.

In the early years of your working life you may feel more invincible, and inclined to take greater risks with your investments, perhaps reasoning that you have got time ahead to recover any possible losses.  Conversely, as you move closer to retirement, you may have a greater degree of wealth and a desire to protect what you now have, by adopting a more risk-averse strategy.

Additionally, your investment strategy will be influenced over the years by various life goals, such as:

• Meeting the costs of school fees, university, weddings, a new car and, maybe, the holiday-of-a-lifetime

• Undertaking improvements to your current home, moving up the property ladder, or looking to secure an additional one elsewhere in the UK, or overseas

• Providing a financial buffer to deliver breathing space should you face illness, unemployment, or unexpected household costs

• Ability to offer financial support to help get your children (or grandchildren) onto the property ladder, or to assist your parents with long-term care

Your approach

Broadly, if you were to consider four key asset classes: equities, property, fixed interest (i.e. government gilts/corporate bonds) and cash – it’s equities that are likely to deliver the greatest level of risk (and potential reward).There’s no rule that says you must have a balanced portfolio that embraces the asset classes mentioned above, or that you need to have it within a spread of UK and overseas sectors – but diversification possibly makes sense. In which case, you may look at the current low return on savings, and feel that a hoped-for return on a range of equities may be something to also consider. It’s worth taking into account two immediate issues. Firstly, investment returns can change markedly from year to year and secondly, this can be more pronounced when looking at specific sectors. For example, back in early 2016 you may, understandably, have taken a view to avoid ‘Emerging Markets’, as it delivered a 9.4% loss in 2015. Yet, by the end of 2016 it was the top performer, with 31.6% growth!

Help is at hand

“We can’t guarantee future winners,” explains Matt, “but we do have extensive market knowledge and various tools at our disposal to help make your investments as effective as possible. Of course, everyone will have different objectives, which are partly dictated by life stage, attitude to risk, available funds, tax position, and also if you primarily require income or growth. In order to deliver measured growth it is sensible to ‘diversify’ and spread the investment net and, in general, to play the longer-game, rather than chasing potential short-term fluctuations here and there.”