Savings and Investments
Hoskin Financial Planning Services can help you put your savings and investments to work to conserve wealth tax-efficiently. How we do this for you will depend on your objectives, timescale and attitude to risk.
Investors can be divided into two broad groups: income seekers and growth seekers. Whichever you are, it is important to establish your investment goals from the outset. This helps to determine your tolerance for risk, thereby ensuring that you select the most appropriate investments for your portfolio. Risk tolerance is actually one of the most important factors. Traditionally, there is a direct relationship between the amount of risk you take and the amount of potential return you can expect. For example, a 30-year-old, with no financial obligations other than rent and savings in a deposit account, might decide to invest for later in life, for example at retirement; With this long-term investment horizon – 35 years or so – it might be appropriate to take on more risk, as any short-term ups and downs can be absorbed in favour of the potential for higher long-term gains.
However, a 30-year-old receiving an inheritance payment, with which they plan to buy a house in five years, needs to be more cautious. Over this relatively short period, they would be more vulnerable to the ups and downs of the market cycle, and would be best served by a relatively cautious approach that will not put their capital at risk. It is important to bear this relationship in mind when making investment decisions. Perhaps consider a range of less volatile investments such as cash, UK bonds and UK equities, to build a core, to which riskier options can then be added. These riskier options can then be adjusted as market conditions change.
Do you think of yourself as the kind of person prepared to take risk, or do you prefer some certainty?
We use a simple questionnaire to help us understand how much risk you are prepared to take, and then recommend investments that match this risk. We can then agree going forward how often you wish to review your investments to make sure they remain in line with your risk profile, and check whether your attitude to risk has changed.