When we put your portfolio together, we implement a systematic plan. Although the elements that make up your portfolio will depend on a variety of personal factors, the way we design it – and keep it on course – will always follow these fundamental principles.
Manage your emotions
Newspapers, websites, social media and the grapevine can all have a bearing on how you feel about your investments. Responding to the constant gossip and rumours by buying or selling investments can really harm your financial plans, so don’t be drawn into it. Ignore the media and stay focused on your goals.
Avoid market timing
The belief that you can make a killing on the markets by buying or selling at the right time has resulted in many more failures than it has successes. Over time, market returns are random, and the only way to get reliable results is to put a robust plan in place and stick to it.
Keep costs low
Low cost investments are key to a successful portfolio, as fees and charges are a real drag on investment returns. Across a diverse portfolio, these charges can really add up, and choosing low cost investments makes a significant difference.
Portfolio structure dominates
Some investments are riskier than others, and the mix of assets in your portfolio will depend on a range of factors such as age, aspirations and attitude to risk. Some risk is essential for growth, but it’s important that it’s at the right level for you.
Over time your portfolio may drift off course from the mix of assets that was recommended. The idea behind rebalancing is that we periodically reset your portfolio back to the original split of investments. This ensures that your portfolio will consistently reflect the level of risk you are happy with.