Risk and return are the counterpoints of any strategy that aims to balance the amount of reward you receive against the amount of risk you are prepared to take when choosing your portfolio.
Investors may have their own strategies, but they may not know of the other strategies available to them. When seeking appropriate wealth management companies, London is the obvious place to start.
Investing from regular income may be a good solution for investors who are looking to preserve their capital over a long period. Retirees or those dependent on fixed incomes may rely on this kind of strategy to pay their regular outgoings and fit this demographic.
Spotting companies whose growth is on an upward curve can potentially generate good returns, even if the price of the shares appears to be high. For wealth management companies, London markets may provide many opportunities for this kind of investment. If these companies continue to be successful and pay significant dividends, they might produce a return for investors.
Buy and hold
Buy low and sell high is a phrase often used; however, the view of growth investment suggests that holding investments with a long-term strategy can offer increased overall returns. Advice from your wealth management specialist will help to explain this strategy.
Another maxim you may be familiar with is ‘If you don’t understand it, don’t invest in it’. When choosing a stock, ensure you know as much about the investment as possible. If you are familiar with the sector, you may have a head start; however, speaking to an adviser is recommended.
Whilst holding an investment to seek growth can be a key strategy, knowing when to sell and revamp your portfolio is also important. There can be many factors that are likely to influence these decisions, such as economic cycles influencing certain sectors, interest rates, market movements and macro-economics, particularly inflation and borrowing. Your wealth management specialist will be abreast of these developments and able to share their knowledge with you.
Index investing is an example of the buy and hold strategy. Investing in index-linked funds means that the investors' fees are often lower than in an actively managed fund; however, the returns can flatten in comparison with the latter.
Some investors may be attracted to specific sectors such as energy, manufacturing, financial services or technology. This approach could offer the opportunity to create a basket of investments reflecting the niche market. This can be a dangerous approach for the individual as it does not offer the diversity of a balanced portfolio.
Choosing a wealth management company that suits your investment needs and the size of your fund will be crucial, with a good fit with your adviser aiming to generate the best results for both parties.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.