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Savings & Investments

Home Services Savings & Investments

Saving to help your kids through University or just for a rainy day?

Whether you are investing to build up a nest egg to use in the future, or you already have a lump sum which you want to grow further, or provide you with an income, Goldstone Wealth Management can help.

Being independent financial advisers we can provide you with impartial advice meaning that we can chose from the most suitable and best savings and investment products in the whole of the market to help you achieve your goals.

We will understand what your goals and objectives are in the short, medium and longer term, and after assessing your attitude to risk, build a portfolio that will help you to save tax and make money.  We will then review your plan with you on an ongoing basis to ensure your plan is always on track.

Some Questions to Consider

Why do You Want to Save or Invest?

From an early age most of us are encouraged to save. Do you remember your first piggy bank or opening a savings account at your local bank or Post Office as a child? Whether we are putting our money in a piggy bank, or into a multinational investment company, our aims are broadly the same; to provide for our future needs, and to protect ourselves against unexpected causes of expenditure.

The first question you need to ask yourself is why do you want to save or invest? I would suggest you consider it simply as a three tier approach, emergency funds, your short term needs/wants and then your medium to longer term investment needs.

Short term savings are generally funds that you set aside, but can be accessed relatively quickly. The most common way of ‘saving’ is into a bank account (‘deposit’ account) where the money can be accessed in an emergency, and for every £1 you put in, you will get £1 back and possibly some interest. At Goldstone Wealth we would suggest that you have an emergency fund in place of around £3,000 before you consider moving to the next level. After your emergency fund is in place your savings for shorter term needs are often for a specific need or purchase, like funding a holiday abroad or a new car within a couple of years term for example. Investments are designed to be held for a longer term, usually at least 5 years. People will often put in place investments to plan for medium to longer term goals for example funding University fees for their children or helping them plan financially in retirement. You will need to be comfortable with putting aside this money for a longer period of time, and should not consider investments unless you have some savings in place. Most investments are not guaranteed to return your money in full, although do offer the prospect of potentially higher returns than deposit accounts. Returns, risk and volatility are the factors that will determine a suitable place for your money.

If you feel that investing is right for you then you will need to consider how and where your money should be invested to give you the best chance of meeting your future financial goals. That is where independent financial advice with Goldstone Wealth Management can help. After understanding your goals, and assessing your attitude to risk, we will create and recommend a suitable portfolio which will put you right on track. We can also review, and align, any existing investment plans you may already have in place too, making sure that your money is doing what is best for you, as well as meeting your current attitude to risk.

Are you Investing for Income or Growth?

In addition to understanding your attitude to risk, it is also important for us to understand what you want to achieve with your investments.

This can be widely split into two categories – investment for income or growth.

Investment for Income.  As the name suggests, the purpose of this type of investment strategy is to provide you with an income now or at some point in the future. This could be used to help pay your bills in retirement or simply provide you with some additional social spending money.

Investment for Growth.  This is also sometimes known as goal based investing where people are saving and/or investing to accumulate capital for a specific objective for example a major purchase, a college fund or planning for retirement.

Creating Your Investment Portfolio

To help you meet your investment goals it is a good practice to spread your money around or “diversify” your investments. Diversification protects you from potentially losing a significant amount of your assets value in a market downturn.

The sharp decline in stock prices in recent years are proof enough that putting all your eggs in one basket can be a risky strategy. In order to diversify correctly, you need to know what kinds of investments to invest in, how much money to have in each one and how to diversify within a particular investment category. This is where taking good financial advice is very important.

Having a lot of investments does not make you diversified. To be diversified you need to have mix of different kinds of investments or assets. UK stocks market equities, bonds and gilts, property and cash are some of these asset types commonly held within a portfolio.  The percentage of each asset held in your own investment portfolio would be based on your own overall attitude to risk.

At Goldstone Wealth Management whether it be face to face advice, or via the Direct Invest online service, we will take time to assess your attitude to risk to ensure that you have an investment mix which will suit you, as well as helping you to achieve your investment goals.

Saving & Investment Options

The list below provides information relating to some of the assets and investment styles that are commonly used within an investment portfolio.

UK Stock Market 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 Investments

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 and Gilts

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

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.

Property Markets

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 Markets

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.

Alternative Investments

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.

NEW - On-Line Investment Tools

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.

Access Direct Invest

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