INSIGHTS

5 STEPS TO START INVESTING

unfiltered, 28 April 2016

If you understand the concept and purpose of investing, this short summary, 5 Steps to Start Investing, can help commence your investment journey.

  1. Seek advice

Before you do anything else, speak with an experienced qualified Investment Adviser to provide guidance on the process and how to build and maintain your own investment portfolio.

  1. Set objectives

This is the most important step. Clearly, we all want to achieve the highest return possible, but a range of other factors need to be considered first, including;

  • How long you are investing for,

  • how much risk you are willing to tolerate and

  • if you intend to live off the income generated.

  • How easy it is to sell the investment (liquidity).

  • Your growth expectations vs your risk tolerance

  • Tax should also be taken into consideration, but not drive an investment decision.

  1. Building your portfolio

The chart below shows the varying asset allocations for each risk profile. How your portfolio is split between lower-risk income assets (fixed income and cash) and growth assets (shares and property) is an important decision as it sets the tone of your portfolio in terms of risk and return.

5 steps table

  1. Focus on quality

We believe portfolios should be well diversified, and invested in high quality assets whether fixed income or shares. Higher risk investments should generally represent a smaller portion of a portfolio.

  1. Review your Asset Allocation

The asset allocation decision should not be set and then forgotten. While it is important to take a medium term view, when putting together a portfolio, asset allocations should be reviewed at least annually to check it remains appropriate for your risk profile.

Even if you have the confidence, time and expertise to navigate the investment landscape on your own, we still recommend doing your homework to identify the best options available based on your risk appetite, objectives and means.

Never under estimate the merit of seeking advice from an experienced investment professional who is a qualified authorised financial adviser. Craigs Advisers are AFAs; we are governed by the Financial Markets Authority and must adhere to strict regulations.  As a Craigs Investment Partners client, you can feel confident in the guidance received because we are qualified investment advisers.

There is a wealth of information available on our website and we also host complementary investing workshops.

If you would like to learn more, it only costs your time.