All investments can carry risk but this varies enormously, depending on the decisions you make. At ASTUS we consider the three elements essential to making correct investment choices are expertise, understanding and expectation. By applying our expertise and ensuring your understanding, expectations can be satisfactorily met.
Everyone has a different risk profile and to ascertain yours, our process includes working through a questionnaire. In this way, we and you can assess the level of investment that is going to best suit your individual preferences and requirements. A higher risk level does generally result in a higher return, but a more important factor is the type of investment which is going to make you feel comfortable and provide you with peace of mind.
If you have a high-risk tolerance, you may be willing to have riskier and more adventurous investments in your portfolio, such as equities or property, in the hope of making potentially higher returns. However, if you are more cautious, you might want to focus on preserving your original capital as much as possible and would therefore prefer stable, low-risk investments, such as bonds or cash, even though these are likely to offer more modest returns. There are any number of factors that materially affect risk and reward, for example, the period of time for which you are investing – the longer that period, the more leeway for rewards to fall and then recover again, although this is not necessarily a foregone conclusion.
In addition, your personal risk tolerance will depend on your life stage, as a younger person you may be happier to take more of a risk to grow your money, reasoning there is time to ride out falls and profit in a later recovery. On the other hand, those reaching their 50s may be more focused on preserving wealth. So, different time frames lead to different approaches and a different risk and reward balance.
Our role at ASTUS, having helped you determine your risk profile and understand the various investment options, is to work with you in developing a bespoke plan, because different objectives, dictate different decisions.
The value of your investment can go down as well as up and you may get back less than you invested.