Savings & Investments

Stock Market Investments generally involve investing through the purchase of shares (equities) in companies quoted on the UK stock exchange. These investments will normally be spread over a number of different companies, thereby spreading the risk.

This tends to be a long term investment strategy as the price of shares can be volatile in the short-term.

Ethical, or Socially Responsible Investment is an investment strategy that considers both financial return and social good   This enables investors to invest in companies that are in line with their own moral stance or, more commonly, by avoiding companies whose activities they would not want to support.

This type of investment strategy is becoming more popular as people become more aware of environmental and social issues and want these to be taken into account when they invest.

Bonds are essentially a way for companies and governments to raise capital.  They do this by issuing bonds where, in return for buying the bond, the issuer promises to pay you a set rate of interest each year and to repay your capital at a set date in the future. Consequently by buying bonds, you are essentially lending money to the issuer.

Gilts are bonds that are issued by the British Government to raise money. Bonds and Gilts are generally considered to be a low risk investment and can be an exceptionally useful financial planning tool since you know exactly what rate of interest you will earn and when you will get your initial investment back. However the likelihood and risk of default of the provider not repaying the original capital back at the end of the term should always be considered when investing in this area.

An investment bond is a single premium life insurance policy that can hold numerous investment funds in one place. The attachment of life insurance means trust planning is available. It is a long term financial commitment but has no fixed term.  It provides a way of investing in funds of different assets for example equities, bonds and property.

Investment bonds can be a very tax efficient method of investing depending on your circumstances and are often used in inheritance tax and trust planning strategies. Withdrawing up to 5% of each investment every year can provide tax efficient income.

The offshore bond allows greater tax efficiency as the growth on the bond ‘rolls up gross’ creating greater gains and can be useful in some situations for ex-pats or higher rate tax payers who expect to become lower rate before encashment.

Overseas Investments is purchasing shares (equities) in companies quoted in the stock exchanges out with the UK. The countries in question will tend to be what is commonly known as ‘developed countries’. These countries include the major European countries plus USA, Canada, Japan, Australia, etc. These investments will normally be spread over a number of different companies in a number of different countries, thereby spreading the risk. This tends to be a long term investment strategy as the price of shares can be volatile in the short-term.

As its name suggest investing in property markets involves investing in commercial and residential property developments. Within a managed investment portfolio this would likely be investments in shares in a number of commercial properties, rather than directly in a particular property, for example shopping centres, business parks and sometimes even student accommodation.

Emerging market is a term that investors use to describe a “developing country”, and these will include countries such as China,  Chile, South Africa, Singapore, etc. Investments in Emerging Markets would be expected to achieve higher returns but be accompanied by greater risk and are therefore not suitable for people with a lower risk profile. These investments will normally be spread over a number of different companies in a number of different countries, thereby spreading the risk. This tends to be a long term investment strategy as the price of shares can be volatile in the short-term.

An alternative investment is an investment in asset classes other than stocks, bonds, property and cash. The term is a relatively loose one and includes tangible assets such as precious metals, art, wine, antiques, coins, or stamps and some financial assets such as a Real Estate Fund, commodities, private equity, distressed securities, hedge funds, carbon credits, venture capital, film production and financial derivatives.

Investments in real estate and forestry are also often termed alternative despite the ancient use of such real assets to enhance and preserve wealth. As these focus generally in one are a limited number of asset areas they would be deemed as a higher risk strategy.

We have recently added our Direct Invest service to enable clients who would like to make investments without the need for face to face advice from a financial advisor.

This online interactive service is provided via our partnership with Parmenion also offers you an opportunity to save or invest in the comfort of your own home starting from as little as £100 per month.