Building an investment portfolio can be a daunting challenge. However, if you are seeking to save over the long-term, perhaps for retirement or school fees, it may be worth taking the time to assess how best to achieve your goals.
Income or capital growth or a mixture of both
You need to consider which investments are right for you. It is easy to be tempted by the potential for short-term profits, particularly with interest rates so low, but you must also consider your ability to cope with losses, as any investment comes with risks. Knowing what you are prepared to lose helps establish your overall risk profile. Other considerations might include your level of financial understanding and whether you require an income or capital growth or a mixture of both.
Constructing your portfolio carefully
Once you have established these objectives, it is important to construct your portfolio carefully and continue to review it on a regular basis. What one person might consider cautious, another might consider risky, so it is important to understand your needs and seek professional financial advice.
Past performance is not necessarily a guide to the future. The value of investments and the income from them can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Tax assumptions are subject to statutory change and the value of tax relief (if any) will depend upon your individual circumstances.