SHORT TO LONG TERM
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
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
- 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
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:
3) Capital Growth
Select an asset class:
Its purely a interest earning investment and provides no Capital
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 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
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
Market sector risk: A sector of an investment
market (banking) moving downwards while another (mining) moves
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
Bonds (gilt) Loans to institutions: low to
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.