"Stick to your investment strategy - do not turn temporary declines into permanent losses"
Warren Buffett
World Renowned Investor
INVESTMENT STRATEGY
Patience is the key to success.
Give yourself time.
Investing is a long term process, and results are not always instantaneous. However if you stick with it, your future self can benefit greatly.
There are lots of positives to investing, however it’s important to stay savvy to ensure you don’t miss out on any opportunities. Everyone has different goals and circumstances when it comes to investing, with many unsure when they should start and where they should put their money. There are lots of assets available and choosing the right one for you is important, but no more so than choosing your investment strategy, and give it time to work.
Here To Help
Investing is a long game and can require a great deal of patience to reap the rewards.
Finding an adviser who will stick with you every step of your financial journey can help you achieve a better, secure future.
Across all the pages in this section, we provide a series of guides to help you find what you should be looking for, particularly when it comes to funding your business to the right levels, so when that time comes, we can help you…
CHOOSE THE ADVISER WHO WILL STAY BY YOUR SIDE.
Are there any main investment strategies?
There are loads of different investment strategies available, each with their own pros and cons.
- Long pull selection
This is a case of ‘playing the long game.’ With this option you pick stocks that seem to suggest they will grow over a few years. - General trading
With general trading, you choose to put your money into a variety of stocks at different times. To choose which, an analysis of markets trends is key. By doing this you are aiming make a great overall gain. - Selective trading
With this option, you pick the stocks with the highest chance of return. By picking the stock that is the most popular you are following the trend. - Buy low, sell high
The challenge of this is in the prediction of the stock market. You need to be able to time buying your stocks cheap and selling when they’re worth more. - Dividend stocks
A dividend is a share of a company’s profits. To invest in this form, you find the stocks that pay a good dividend and achieve a steady income. These stocks can be held for a longer period of time. One tactic with this is buying them just to get the dividend and then selling them on, but this does involve more knowledge of the stock market.
Asset Allocation
There’s a famous saying: “Don’t put all your eggs in one basket”. This applies to any investments you make. Spreading your money across different assets helps eliminate potential risk and balance out your investment portfolio. This means, if one is failing, another could be rising, making the overall portfolio level.
Spreading your investments like this is called asset allocation. Speak to your financial adviser to ensure any future goals, your risk level and investment desires are all taken into account.
If you invest in a good mix of assets, you’re getting a good investment portfolio.
What are the risk levels?
There are four levels of risk:
- Capital preservation
This simply preserves your money. You’ll be matching inflation at the lowest rate. - Balanced
By spreading your money between assets, your portfolio can become balanced. - Capital Growth
With this, you still balance your portfolio, but slightly more is put in a higher-risk equity to get higher returns. - Aggressive
With this, you’re really going for it with 70% of your portfolio in high-risk equities. Only choose this option if you have some more assets in a safer place.
So how do I manage my portfolio?
There are several ways you can manage your investments. Whatever way you do, your main aim should always be to receive a good income and reward.
You can choose to run with an active portfolio management or a passive portfolio management strategy. An active management involves a fund manager who will chase higher returns for you. Therefore, this option will have higher fees than a passive portfolio however it can be more effective over a long time.
Sometimes different parts of your portfolio can grow faster than others. You can regulate this to make sure all your assets match your risk tolerance with the help of your Financial Adviser.
So how do I choose where to invest?
Most people believe that to invest is a risky move as opposed to savings. However often savings lose much more value than investing and can’t keep up with investing. Your financial adviser is your best port of call to set you on the right road.
1. What are your goals?
Remember why you started doing this, what do you want at the end of the day? Where do you want your investment to get you to in couple of years, or five years? Is your goal to get an extra income for retirement? Every goal requires a different kind of investing, make sure you pick the right one for you.
2. Wait it out
Investing tends to be a long game. Those with short term gains tend to lose value much quicker, so to really get the most out of the investment world, you need to learn to be patient. Start early, don’t panic and make sure you keep your long term goals in mind always.
3. Expand your wings
Keep your portfolio diverse with different companies and different assets included. With their different risk levels and growth, they can help balance each other out and allow your portfolio to grow.
4. Don’t try and beat the market
Stock markets are as unreliable as the weather in their predictability so it’s incredibly unlikely that you’ll be able to read them every time. Make your portfolio prepared for all occasions and keep it balanced to weather any storm.
5. Keep the emotions out of it
Letting your feelings get involved can lead to snap decisions and rushed choices. Using a financial adviser can keep you neutral; opt for as much or as little involvement as you wish for. They won’t overrule you, but they will stop you making any decisions that seem too based on emotion or could lead you down a risky path.
Abacus Associates manages the personal wealth of many people across the UK and over £1 billion of investments, providing clients with financial advice and access to investment products and services.
We do not charge for initial consultation meetings. If you would like a face-to-face meeting, feel free to pop over to our office or we can always can come to you.
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Abacus Associates is a trading style of Saltus Partnership Limited which is authorised and regulated by the Financial Conduct Authority. FCA reference number: 554381
Registered office: Solent Business Park, 4500 Parkway, Whiteley, Fareham PO15 7AZ. Registered number: 07586042
Will writing and some aspects of tax planning are not regulated by the Financial Conduct Authority.
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