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Investments Planning

Investments are critical to the lifestyles and well being of most of us, yet too often we are content to put ourselves at the mercy of others when investing money we have accumulated over time…

How to start:

    With help from us we can:
  • Prepare for a marathon
  • Get your mind set and plan a destination
  • Set an investment goal and decide how you will achieve it.
  • Take a reality check on your current financial situation, are your goals realistic?
  • Make sure you will be able to modify your investment strategies half way through if needed.
  • Get financial advice
  • Decide your affordable contribution and examine on the term, the risk, the versatility, the underlying costs of a suggested investment product and the funds into which is suitable for you.
  • Protect and nurture that investment, be proactive with the adviser and inform your self to make quicker decisions that can possibly increase your returns.

Three forms of remuneration can be earned from your investments:
Different combinations of investments are used to achieve different targets:

You can invest into a medium to long term investment plan; 5 to 15 years.
Recurring and Lump Sum investments in a Unit Trust
Property Syndications or Property portfolio’s ( DROP MENU) vir Capital investments en PIC.

Return’s are via:
1) Interest
2) Dividends
3) Capital Growth

Select an asset class:

Cash investments:
Its purely a interest earning investment and provides no Capital growth.
Term deposits: Lend your money to the bank for a fixed term e.g. 6 months to two years.
Bank will return money with interest.
The main dis-attraction is that they selfdom only keep up with the rate of inflation, meaning that your money will not be able to give you a real big return and you are back where you started.

Money Markets:
You put your money in a bank account or unit trust fund (by unit trust Company’s) in which your money is pooled with that of other small investors lent to big institutions.
This way you get a higher interest rate.
Unit trust funds are the best way to protect your money and to keep it growing above inflation, giving you a real return after costs and taxes are taken into account.

National certificates of deposit:
Huge amounts of money lent to large institutions such as banks and big businesses.

The three big attractions of cash investments are:
Your capital is normally guaranteed
Your rate of interest is often guaranteed
You can access your money fairly and quickly, particularly if it is in a money market account.
On the other hand:
There are far more risky investment funds:
Your capital is not guaranteed
Your rate of interest is not guaranteed
Your money will either show a very high return of about 25% to 60% per year, but
The chance to loose a partial amount is possible.

Understand the risks:
Systematic risk: The potential of a system, such as the banking system, collapsing.
Prudential risk: The risk of an asset or fund manager making the wrong decisions.
Advice risk: The risk of being misled into investing in the wrong product.
Market risk: The risk of particular market losing money.
Market sector risk: A sector of an investment market (banking) moving downwards while another (mining) moves up.
Volatility risk: Referring to the fluctuation in the value of an investment.
If the value of the investment is down when you want to sell the investment, you will loose money.
The share market is far more volatile the unit trust or bond market, but at the same time, historically it has provided better returns over long term.

The different risk sectors:
Asset class: low risk
Cash savings or deposit accounts: low risk.
Property Houses, shops, and factories: low risk.
Bonds (gilt) Loans to institutions: low to medium risk.
Shares (equities) Part ownership of companies: medium to high risk.
Derivatives Futures: medium to high risk.

Your investment target:
If you are investing for retirement, your risk profile should be lower than if you were investing for a want, such as a beach house. Your investment goals must at least perform twice above the rate of inflation, after costs and taxes are deducted.

Diversify your investment:
This means that you should spread your investments across the asset classes and over the sectors within the asset classes.

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