While you may find you’re in a comfortable position with your finances, there are things you need to consider before investing.

You know that just having that money sitting in the bank, doing little but perhaps generating a small amount of interest, isn’t financially smart.

Establishing an investment portfolio can be a good choice to get your money working harder for you. But before you make the investment leap, make sure you consider the points below.


Ask yourself three important questions

Choosing investments for your portfolio is not easy. You clearly want the ‘best’ investments, but you need to make sure that the investments you choose are appropriate for your circumstances and goals.

So before investing, you need to ask yourself these important questions.

  • Firstly, what are your short-term financial goals?
  • What are your long-term financial goals?
  • What is your ‘risk profile’?

You wouldn’t open a bank account without establishing what it’s for. So why should you begin investing without knowing your goals and how much you’re willing to invest?


Which investment is right for you?

Some people are comfortable with higher risk investments because they offer the opportunity for higher returns. On the other hand, some people are more conservative and prefer less risky investments such as fixed interest.

When selecting your investments, it’s important to understand that the level of return will differ.

Once you have established your risk profile – from conservative, through balanced to growth – you can choose investments to suit your risk profile.

Options you can choose for your investment portfolio include:

  • Cash – low risk, low return
  • Fixed interest – low to moderate risk, moderate return
  • Property – moderate to high risk, moderate to high return
  • Shares – high risk, high return

Finding the right option before investing means you and your financial advisor can work together to determine the ideal outcomes for your investment.


Spread your risks

Ever heard the saying, hedge your bets? Or don’t put all your eggs in one basket? These are extremely relevant to investment. You don’t want all of your money to be sitting in the one investment.

Diversification is vital because the positive returns you receive from one investment can generally offset any negative returns you may receive from others.


Speak to your financial advisor before investing

There are a lot of issues to consider in choosing the appropriate investment mix for your needs and goals.

A financial advisor can help you understand how investment works and how it will work for YOU. Our team will work with you to help establish your goals, your risk profile and the ideal investment option for your portfolio.

Speak to our team and we’ll organise a consultation about how we can help your investments succeed.



General Advice Disclaimer:

This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.