Investment Planning Help Guides

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Investment Planning Help Guides

We have put together a few help guides that explain various parts of Investment Planning including various available products, these guides should only be used as a reference and are solely for information purposes only. We have tried to make them as accurate as possible based on our understanding of current regulations and tax allowances. However Adviser Index always recommends seeking advice from professionals such as Financial Advisers, Solicitors and Accountants for advice on personal circumstances.

What is Investment Planning?

Investment planning focuses on identifying effective investment strategies according to an investor’s risk appetite and financial goals. There is a wide variety of investment options, including shares, bonds, mutual funds, bank deposits, real estate and futures and options. Through investment planning, one can identify the most appropriate portfolio mix.

Investment planning begins after you have taken into account your current and expected income level and have laid down your financial goals. The important aspects of investment planning are:

Capital growth versus regular income: Investors aiming at long-term goals focus on capital growth. A long-term investment will allow you to tide over rough times without changing your plans. Stocks, mutual funds and real estate represent investment options for capital growth. On the other hand, if you’re investing to meet a short-term goal or to give you a regular flow of funds to complement your present salary, you should opt for income investments. These investments generate a regular flow of income in the form of dividends and interest and include fixed-income investments, such as bonds and certificates of deposit (CDs). While making a selection, you should consider the tax implications and associated risks.

Risk: Every investment option represents a unique risk-return trade-off. Typically, more risky investments offer higher returns in order to make it worthwhile for investors to take on the additional risk. Investment planning should take into account an investor’s risk appetite, which dependents on your current income level, savings, lifestyle and responsibilities.

Benefits of Investment planning range from wealth enhancement, generating income or capital gains, diversifying your existing portfolio not putting all your eggs in one basket and the potential saving of taxes using tax efficient wrappers such as ISAs

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