People generally invest in order to provide themselves and
their families with a better standard of living. In order
to do so, it is necessary to put money aside now in a manner
that is most likely to produce results later on. But all forms
of investment carry the risk that investment values will fall,
or, at best fail to keep pace with inflation.
is why we invariably recommend to our clients that they follow
an asset allocation strategy. In simple terms this means not
putting all their eggs in one basket, but matching where money
is invested to their needs and circumstances, reflecting their
attitude to risk.
In other words, if you are putting something aside for a rainy day, then investing in property or equities may not be a good idea, because it can be difficult to get access to the former and the latter can be highly volatile. On the other hand investing money in a bank account may not be a good way of saving over the longer term as interest rates very seldom outperform inflation.
Our investment philosophy looks at each client’s individual
goals and then builds an investment strategy that allocates
money into different asset classes (such as equities, deposits,
property and so on), each appropriate to the purpose and time
Of course, perspectives – and needs – change
over time and we undertake regular reviews with our clients
with the aim of ensuring that, as requirements change, so
does the balance of investments held. (Provided you have signed up for one of our ongoing review services.)
One of the benefits of following an asset allocation strategy
is that not all investments move in the same direction at
the same time – or at the same speed. For example, when
interest rates rise, equity values might weaken, as people
believe they can obtain a better return on their money using
deposits or gilts. Similarly, equity markets in the Far East
may fall while those in the UK rise, and vice versa.
Of course, by spreading risk, investors inevitably miss out
on the largest rises in any one sector, but they will equally
miss out on the largest falls in another. If one could tell
in advance which markets would rise and fall, he or she might
invest serially in each rising market and sell before it starts
to fall. In practice this is impossible, so we believe diversifying assets classes makes sense.
THE VALUE OF YOUR INVESTMENT CAN
GO DOWN AS WELL AS UP AND YOU MAY NOT GET BACK THE FULL AMOUNT
INVESTED. LEVELS AND BASES OF AND RELIEFS FROM TAXATION ARE
SUBJECT TO CHANGE AND THEIR VALUE DEPENDS ON THE INDIVIDUAL
CIRCUMSTANCES OF THE INVESTOR.
The Financial Conduct Authority does not regulate taxation
advice and deposit accounts.