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The investment process: science, not art

The investment process: science, not art

Do you understand the way in which an investment portfolio is designed? If not, read on…

There are typically six stages before your investment portfolio can be created:

1) Risk profiling: All investment involves risk and understanding your risk profile is a key starting point.

2) Goal setting: Investment is ultimately a means to an end. There is always a reason – and often more than one – for investing.

3) Asset allocation: This stage sets the appropriate broad types of investment and within each category the individual sectors.

4) Fund selection: Once the high level choices are made, the next decision is which funds to use in each chosen sector.

5) Tax considerations: Tax should never dictate investment, but it can determine how and where investments are held – the so-called investment wrappers.

6) Platform selection: The final part of the process before implementation is the selection of a platform through which to make the investment.

Please get in touch with us if you need more information about investment platforms.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

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