Services Investing & Risk

 

Risk

 

Investing & Risk

Whenever you save or invest your money there is always an element of risk involved. It could be the risk that interest rates will fall or inflation will erode the true purchasing power of your capital. It could be the market risk that a particular stock market will fall reducing the value of your investment. Currency risk, political risk, sector risk – there are many different aspects of risk that need to be considered when putting together your investment portfolio, but a very simplistic way to help reduce risk is to take a diversified approach to investing.

By way of a very simple example, imagine that there are only 2 companies, one company making t-shirts and one company making woolly jumpers. If the weather forecast is for sunshine, then investors would be wise to buy shares in the t-shirt company as they expect demand for t-shirts to increase and sales to rise, increasing the company share price. However, we know that it is not always sunny and therefore a good manager would buy shares in both companies, so when one share price is static or even falling the other is able to support and perhaps offset the falls.

Our investment service helps ensure that you take a diversified approach with your portfolio and the starting point for that service is our risk profile assessment.

Risk Profile Assessment

As part of our advice process, we make use of powerful software to help ascertain your own individual attitude to investment risk. This thought provoking exercise will show you in graphic terms what risk looks like and what realistic returns you can expect for different levels of risk. The end result of the risk profiling exercise is that we can tailor an investment portfolio to meet your objectives. Whether you are ultra cautious, super adventurous, or more likely, somewhere in between, we will be able to tailor an investment to suit you.

Please refer to the Risk & Return Guide in the library section of our website for further details of our risk assessment process.