8:00 a.m. November 16, 2021
I just inherited Â£ 300,000 from my father. I have Â£ 100,000 left to pay off my mortgage so I’m going to write that off, but I want to invest the rest so that it grows over my lifetime to give my own children an inheritance. I have done some reading on investing, but I don’t feel confident enough to decide where I should put it. What do you suggest?
Douglas Bridges of Smith & Pinching responds:
There is no quick and easy answer to this question, I’m afraid. Choosing an investment portfolio is a complex process and I strongly recommend that you seek advice before committing your money to specific investment assets.
Your investment strategy should be part of an overall financial plan that identifies your goals and puts you on track to achieve them. It should also recognize and accompany any investment preferences you may have – your ethical stance, for example. He should also take advantage of any tax savings that can be realized.
An important aspect that you should consider is how you feel about the risk of investing. All equity investments come with an element of risk, but you don’t need to take on more risk than is convenient for you. Your portfolio can be built to match your investment risk profile.
When investing, diversification is normally important. The old adage of not putting all your eggs in one basket still holds true. This means that if a particular sector of the market were in difficulty, your portfolio would have some resilience. However, it also doesn’t mean that you have to spread your investments too widely – over-diversification is also problematic.
Investment values ââchange over time and it is normal for portfolios to move up and down. It is essential that you view investing as a long-term process and plan carefully if you want to access your funds at any given time. Equally important is keeping your wallet under review and adjusting it as needed, so that it continues to go the way at different stages of your life.
Portfolio management is a service offered by financial advisers whereby investment managers make changes to your portfolio as markets change in order to optimize performance and mitigate potential losses. This service may be provided in addition by a third party or, as with Smith & Pinching, may be an integral part of its investment advisory service.
The opinions expressed in this article do not constitute advice. The value of an investment and the income from it can go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than what you initially invested.
For more information please visit www.smith-pinching.co.uk