Looking forward to having more time to explore faraway places?
Retirement is a time for you to do the things you’ve always wanted to do. Perhaps you’re looking forward to having more time to explore faraway places. Or maybe you dream of simply waking up each day and doing whatever takes your fancy. However you see your future, it helps to start planning for it as soon as possible.
Don’t let inflation reduce the value of your investment returns
Inflation can have a significant impact on our finances in a number of ways. But what exactly does it mean? And what impact could it have on our savings and investments? It’s important to understand how inflation works, as well as the effects it has on our financial planning. As the American economist Milton Friedman remarked, ‘Inflation is taxation without legislation.’
Your wealth should work in all the ways you want it to. Whatever your goals are in life, careful planning and successful investing of your wealth can help you get there. Whatever stage of life you’re at, we’ll help navigate you through the opportunities and challenges you may face.
Market index following the overall performance of a selection of investments
Tracker funds and exchange-traded funds (ETFs) are investments that aim to mirror the performance of a market index. A market index follows the overall performance of a selection of investments. The FTSE 100 is an example of a market index – it includes the 100 companies with the largest value on the London Stock Exchange.
Collective investment schemes – also known as ‘pooled investment funds’ – are a way of combining sums of money from many people into a large fund spread across many investments and managed by a professional fund manager.
Taking a more diverse approach to asset allocation
Investment trusts are a well-established way of investing. Many investors prefer to invest in a fund rather than by picking individual stocks, shares or other assets. Funds allow you to diversify your portfolio easily, as well as giving you the chance to benefit from the expertise of fund managers.
Investing through a tax-efficient wrapper, such as an Individual Savings Account (ISA), can give a significant boost to an overall investment portfolio, but they should be blended with an appropriate investment strategy to give the best outcome.
Structuring your investment portfolio throughout life
If low interest rates continue to remain, it really matters where you invest your money. Investing for income means choosing assets that are able to provide you with a regular income. This is in contrast to investing for growth, which focuses on how much your assets could gain in value.
Staying disciplined and sticking to your plan is key
The overall direction of developed stock markets is a relentless and continual rise in value over the very long term, punctuated by falls. It’s important not to let global uncertainties affect your financial planning for the years ahead. Individuals who stop their investment planning, particularly during market downturns, can often miss out on opportunities to invest at lower prices.
Asset allocation depends on your goals, your attitude to risk, your capacity for loss and market conditions. Understanding investment risk and determining what level of risk you feel comfortable with before you invest is an important part of the investment-decision process. Potential returns available from different kinds of investment, and the risks involved, change over time as a result of economic, political and regulatory developments, as well as a host of other factors.
