Raffi PailagianMBA, BSc, DipFP
Adviser / Managing Partner
Creating a good personal financial plan is a lot like baking a cake. If you leave one element out, or get the ratios wrong, it won’t rise properly and you won’t get the results you are hoping for.
Over the next couple of weeks we will be looking at the key components of a perfectly prepared financial plan, namely:
Each of these elements needs to be given proper consideration in its own right, and in relation to each of the other components, so that you have a balanced whole.
Each component of a good financial plan plays a role. In the case of your Investment Portfolio, there are a number of reasons it is important:
Simply put Portfolio Management is the selection and supervision of a range of assets to meet the financial goals of an investor. But nothing is ever quite as simple as it seems.
In structuring a successful portfolio of investments there are trade-offs that need to be made. Risk vs return; active vs passive; growth vs income, and the list goes on.
Within a portfolio you can, and should, have a range of different asset classes. They may include shares, bonds, cash, commodities. But you may also have art, property trusts and other investment types.
There are a number of factors you need to take into consideration when deciding what asset classes, and within that, what specific investments, to include in your portfolio:
There are as many types of Portfolios as there are investors, but there are some broad styles that you can use as a starting point.
Of course, any portfolio can, and possibly should, incorporate all of the above types of investment strategies. Over the lifetime of your portfolio, you may move from Speculative, through Aggressive to Defensive as you move from wealth building to income generating in retirement. The beauty of investing is the ability to rebalance as your needs change.
Whatever the makeup of your Portfolio is, it is important to keep a close eye on market shifts, the world economy, the political climate, and even natural disasters and weather events. All of these can impact the performance of your portfolio.
This is why it is important to have an experienced, qualified financial planner you can trust. Because it’s not just about what to buy, but when, as well as how it fits with the rest of your financial plan.
In our next article, we will look at the role of Property in your Financial Plan. From your family home to investment properties, we will help you understand when and how to invest.
When you want to chat about getting started on a Financial Plan, or looking at the effectiveness of the one you already have, please contact us on 02 9976 3388 or click below and we’ll be in touch:
Head Office: Suite 105-106, Level 1, 39 East Esplanade, Manly NSW 2095
Manly Financial Services Pty Ltd is a Corporate Authorised Representative (Representative No.: 321127) ABN 38 115 806 883 of Futuro Financial Services Pty Ltd, Australian Financial Services Licensee (AFSL 238478)
This website contains general advice only. You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Futuro Financial Services Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website.