Creating an investment portfolio is best undertaken with the help of a Financial Planner, however there are some things you can think about upfront to help you get the most out of a meeting with us at Southern Advisory.
What are your goals and investment timeframe?
The first step in creating an investment portfolio is to identify what you want to achieve. The investment options you select, and how long you plan to be invested for, will be influenced by your goals and how quickly you want to achieve them.
What is your tolerance for investment risk?
When you select investments, you need to make sure you’re comfortable with the amount of investment risk you’re taking on and the potential consequences of your investment decisions.
Several factors will affect your risk tolerance:
- Your financial goals
- Your reasons for investing
- Your performance expectations
- How long you plan to stay invested
- Your knowledge of and past experience with investment markets
- How you feel about sudden increases and decreases in the value of your investments
Remember that your tolerance for investment risk may change as you gain experience and confidence with investing.
Which asset classes are right for you?
Different combinations of asset classes may work best for you depending on your attitude to risk, investment time frame and financial and lifestyle goals. The end result – how your money is invested across the different asset classes – is known as your ‘asset allocation’.
For example, if you are a risk-averse investor looking for stable returns, your planner would probably weight your asset allocation more heavily towards defensive investments such as cash and fixed interest. On the other hand, if you are comfortable with short-term fluctuations in the value of your assets and want to invest for more than five years, your planner would include more growth investments such as Australian and international shares.
If you’d like to create an investment portfolio tailored to help you achieve your lifestyle goals and financial needs, Contact Us to organise your complimentary, no-obligation consultation with a Southern Advisory Financial Planner.