Allocating Your Money
When building an investment portfolio, there are two important considerations:
- Asset Allocation: how you spread your money between different asset types and regions
- Fund Selection: which managers and funds to use for each sector chosen
If your Risk Score is low, most of your money will be invested in Cash. If your Risk Score is high, most of your money will be allocated to Equity investments. Here’s a more detailed description of each asset class.
Cash: You receive interest on money deposited with banks and other lenders. Often, the rate is relatively low but your money is pretty secure and cannot fall in value. However, inflation can reduce the real value of your money.
UK Fixed Interest: Your money is lent to the Government, other institutions and companies in return for an interest rate. The rate is often higher than cash deposits but the value of your money can vary.
Property: Whilst investment in commercial property may not be a liquid asset, it offers the prospect of both rental income and capital growth through property price rises.
Equity: Known as stocks and shares, your money is invested in companies, providing possible income through dividends, and capital growth as the companies prosper. You can look to reduce the risk of losing money by spreading it across UK and carefully selected world markets.
All our portfolio's can be found on our website
