How much are you willing to
loose....
All investments including cash on deposit,
carry risk.
In terms of the cash you keep on deposit at
a bank of building society, the risk is inflation. The capital remains the same,
if you take the interest, but inflation eats into the purchasing power over a
period of time. If the interest is left in the account, then it needs to be the
same as inflation just to keep parity. If the interest you get net is say, 2%
and inflation is running at 3% then your purchasing power is reduced by 1% pa. over a period
of one year. The risk in this case is the financial security of the bank or
building society.
Investment risk depends on many
factors, including inflation, interest rates, legislation and the stock market
in general.
How much risk you are able to accept, depends on even more factors:
- The amount of money you are
investing against your overall liquid assets
- The amount of loss you are willing
to accept on a set time-line, against the amount of profit you wish to gain
through making the investment. The permutations are endless.
Risk assessment
We use a Psychometric question and answer
risk assessment system. This is made up of a series of questions with a
multi-choice set of answers. You choose the answer that best matches your
circumstances.
The questions are weighted and the answers
scored. The matrix then gives us Seven Risk Groups, and depending on the
total score, you are placed in one of these groups.
The system also determines the best asset
allocation for each risk group. We adhere to this asset allocation, and re-balance the portfolio
when the need arises. We DO NOT undertake any investment
instructions, without first going through this procedure.
Investment Premium
If you decide to take your money from the
cash environment (Banks & Building Societies) and venture into the equity based
investment arena, then you deserve a Bonus Investment Premium. In our opinion,
this ought to be at least twice what you can get from leaving your money in a
cash deposit. This then becomes the minimum Benchmark for all your investments,
irrespective of your risk grade.
Do you know what your Risk
Tolerance level is?
To talk this over call: 01299 271471 (working hours)
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