Do you want to learn more about investment management Newcastle? How you decide to save and invest is critical for making the most from your money. There are many avenues to choose from. From ISAs to government-backed stock, they all come with different levels of risk and reward.
Here at Seven Bridges, we specialise in creating holistic strategies tailored to our clients’ specific needs and aspirations.
Understanding your own attitude towards risk and reward is one of the key elements of creating an effective strategy.
All people work on different timescales, have a different capacity to absorb losses and hold different views on what risk means to them.
In general, high-risk investments come with greater potential returns and a higher chance of loss of funds. Low-risk investments on the other hand generally offer lower returns. However, in the world of investment, there are no hard and fast rules.
The timeframe of your investments also plays a major role in risk and reward. A long-term approach to investment is wise, with most investment management experts recommending an investment term of at least 5 years.
If you’re looking to minimise risk, diversifying your investments will help reduce the overall risk of your investment management strategy. Rather than targeting a specialist area, we advise spreading your investments.
Your dedicated investment management specialist will carry out in-depth assessments of your financial picture. It will also address the willingness and capacity for risk to ensure you’re making the best decisions for your long term success.
Making up a sizeable chunk of national debts, Government Gilts are issued by the government when it needs to borrow funds.
Government gilts provide an income in the form of interest payments and/or a final redemption payment. Inflation and increasing interest rates can decrease the value of Gilts. On the other hand, a fall in interest rates often increase the value of the gilt.
Aside from cash investments, government-backed stock is one of the lowest risk options available to investors. They are often used by investors to spread the risk of their overall strategy.
Similar to Government Gilts, but issued by multinational companies, Corporate bonds are slightly higher risk than Government Gilts. This is due to the risk of bankruptcy being higher than the risk of a Government being unable to repay its debts. They do, however, come with greater returns making them a good choice for those who are willing and able to take greater risks.
Corporate bonds are rarely invested into by individuals but are instead in to be fund managers or other investment management professionals.
Individual Savings Accounts can be a valuable asset in your overall investment strategy. In the 2020/21 tax year, ISAs offer an allowance of £20,000 which can be invested into cash, stocks and shares or both.
ISAs are a tax-efficient saving tool and if used correctly, can be a valuable avenue for saving and investing.
Open-Ended Collective Investments and Unit Trusts allow the individual to collectively invest which spreads the risk and controls costs.
We recommend seeking the advice of an investment management professional. This is to ensure your money is being managed responsibly and effectively.
To speak with one of our team today or to arrange a free consultation, contact us here via our online form.