Identify Your Attitute to Investing

Everyone has different investment needs and goals that they set for themselves.

Your attitude to risk will determine the types of investments that suit your needs, as will your objectives and the time frame you intend to invest for. Are you looking to get an income from your investment or are you looking to achieve greater growth? There are investments to suit almost every investment objective.

When deciding on how and what to invest in, you need consider your personal investment objectives, financial situation and particular needs. No one solution fits all needs. But where do you begin? The following three-step process can help you consider some of the important factors as a starting point.

Step 1 – Clarify your risk profile

Read the following questions and think about which description you feel most closely resembles your investment objectives.

• Are you happy with low growth investments that provide returns marginally above inflation for very low risk or are you prepared to take more risk with your investments to potentially achieve significantly higher returns.

• Are you security conscious or are you prepared to accept short-term volatility. Investing is like climbing a ladder, the higher you go, the more you can accomplish but the riskier the venture becomes.

The higher the level of risk you are willing to accept, the higher the potential returns may be. Conversely, if you prefer to take less risk, you may be more willing to accept lower return for less fluctuation.

Step 2 – Set your investment objective

Next you need to look at your investment objectives and expectations. Are you building wealth so that you can retire sooner or do you want your investments to provide a regular income stream? Or perhaps you are looking for both. Different investments aim to provide varying levels of income and growth.

Generally speaking, those investments that aim to provide an income stream are more conservatively invested (for example cash and fixed interest), whereas those that focus on growth will be invested more aggressively in shares and perhaps property (domestically and internationally).

Step 3 – How long are you prepared to invest for?

Think about what your objectives are. Are you saving for a holiday, children’s education or a deposit on a new home and will need the money in the next year or so. Or, are you saving for retirement and don’t need to access the money for at least five years? The time frame of your goals will assist in deciding how to invest your money.

As a Financial Adviser Representative, my role is to work closely with my clients to clarify their expectations and work with them to tailor a solution that is right for them. With access to a wide range of investments and investment strategies, I have the tools that you need to tailor a plan that is right for you.

So don’t delay, contact me today to find out how an investment strategy that is right for you can lead to future financial security and peace of mind.

KW Choong / kwchoong@savemoneyforlife.com