One size does not fit all when it comes to investments
There is no single investment solution that suits everyone; what will work for you depends on your own objectives, time-frame and risk appetite. With professional guidance you can find the perfect fit for you.
Identifying your risk appetite
First, you must be clear about how much risk you are willing to take with your money. In the current low-interest rate climate some risk is necessary to achieve returns that will outpace inflation. But your investment decisions shouldn’t keep you awake at night, so it is essential to pinpoint the right risk/reward balance for you.
It is extremely difficult to effectively assess your own tolerance for risk. An experienced financial professional is best placed to ask the right questions and use the appropriate tools to create a clear and objective risk profile for you.
Defining your time horizon
Experts say ‘investing is a marathon, not a sprint’ for a good reason. If you have the means and the patience to invest in the long-term, you are more likely to enjoy better returns.
Understanding your time horizon is also the key to future-proofing your investments so you can get hold of them when you need to. In any case, you never know when your plans may change unexpectedly, so it is important to hold some liquid assets that can be sold to release capital if needed.
Reducing risk through diversification
The higher your concentration in one particular area, the higher the risk. Investments skewed towards UK-based assets, for example, are more vulnerable to downturns in the British market.
A good portfolio minimises risk by spreading investments across multiple, unrelated areas through diversification, by asset type – cash, fixed income (government and corporate bonds), shares and ‘real assets’ such as property – as well as by geographic region and market sector. You can further diversify by choosing an adviser who uses a ‘multi-manager’ approach to spread investments out among several different fund managers selected for their expertise in specific markets.
The impact of taxation
Without suitable tax planning in place, you could find your returns are slashed by taxes that could have been avoided or at least significantly reduced.
British expatriates can make the most of tax advantages in both Spain and the UK with personalised advice from a regulated adviser who specialises in both tax regimes. They can recommend tax-efficient structures that legitimately protect you – and your heirs – from paying more tax than necessary.
Remember that your circumstances and objectives change over time – as can tax rules – so what works for you now may not be suitable in years to come. It is crucial to regularly review how you manage your wealth to make sure it keeps up with your situation.
As the UK prepares to leave the EU, it is sensible to consider a financial ‘health check’ now to protect your wealth from Brexit uncertainty and take advantage of today’s opportunities while you can.
All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment advice.
Keep up to date on the financial issues that may affect you on the Blevins Franks news page at www.blevinsfranks.com