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Reviewing your needs and goals – take time to think about what you really want from your investments?

You need to consider what you really want from your investments. Knowing yourself, your needs and financial and lifestyle goals, and your appetite for risk is a good start.

Consider your reasons for investing. It is important to know why you are investing. The first step is to consider your financial situation and your reasons for investing.

For example, you might be:

• looking for a way to achieve higher returns than on your cash savings

• putting money aside to help pay for a specific goal, such as your children’s or grandchildren’s education or their future wedding

• planning for your retirement

Determining your reasons for investing now will help you work out your investment objectives and influence how your investments are managed in future.

Decide on how long to invest. If you are investing with a specific financial and lifestyle goal in mind, you have probably got a date in mind too. If you have got a few goals, some may be further away in time than others, so you’ll need to have different strategies for your different investments.

Investments rise and fall in value, so it is sensible to use cash savings for your short-term goals and invest for your longer-term goals.

Short-term. Most investments need at least a five-year commitment, but there are other options if you do not want to invest for this long, such as cash savings.

Medium-term. Committing your money for at least five years opens up a selection of investments that might suit you. Your investments make up your ‘portfolio’ and if appropriate should contain a mix of funds investing in shares, bonds and other assets, or a mixture of these, which are carefully selected and monitored for performance.

Long-term. Let us say you start investing for your retirement when you’re fairly young. You might have 25 or 35 years before you need to start drawing money from your investments. With time on your side, you might consider riskier funds that can offer the chance of bigger returns in exchange for an increased risk of losing your money.

As you approach retirement, you might sell off some of these riskier investments and move to safer options with the aim of protecting your investments and their returns.

How much time you have will make a big impact on creating your investment portfolio. As a general rule, the longer you hold investments, the better the chance they will outperform cash – but there can never be a guarantee of this.

Establish an investment plan

Once you are happy and have set your financial and lifestyle goals, the next step is to get your investment portfolio in place. We will help you identify the right type of investment options suitable for you.

Build a diversified portfolio

Holding a balanced, diversified portfolio with a mix of investments will help protect it from the ups and downs of the markets. Different types of investments perform well under different economic conditions. By diversifying your portfolio, you can aim to make these differences in performance work for you.

Diversifying your portfolio in a few different ways through funds that invest across:

• different types of investments

• different countries and markets

• different types of industries and companies

A diversified portfolio is likely to include a wide mix of investment types, markets and industries. How much you invest in each is called your ‘asset allocation’.

Make the most of tax allowances

As well as deciding what to invest in, think about how you will hold your investments. Some types of tax-efficient accounts normally allow you to keep more of the returns you make. It is always worth thinking about whether you’re making the most of your tax allowances too.

You also need to bear in mind that these tax rules can change at any time, and the value of any particular tax treatment to you will depend on your individual circumstances.

Review your portfolio periodically

Periodically checking to see if your portfolio aligns with your goals is an important aspect of investing.

These are some aspects of your portfolio you may want to check up on annually:

Changes to your financial goals.

Has something happened in your life that calls for a fundamental change to your financial life plan? Maybe a change in circumstances has changed your time horizon or the amount of risk you are willing to handle. If so, it is important to take a hard look at your portfolio to determine whether it aligns with your revised financial goals.

Asset allocation. An important part of investment planning is setting an asset allocation that you feel comfortable with. Although your portfolio may have been in line with your desired asset allocation at the beginning of the year, depending on the performance of your portfolio, your asset allocation may have changed over the period in question.

If your actual allocations are outside of your targets, then perhaps it is time to readjust your portfolio to get it back in line with your original targets.

Diversification. Along with a portfolio with a proper asset class balance, you will want to ensure that you are properly diversified inside each asset class.

Performance. Look at whether there are certain aspects of your portfolio that need rebalancing. You may also want to consider selling to help offset capital gains you might take throughout the year.

ONCE YOU’RE HAPPY AND HAVE SET YOUR FINANCIAL AND LIFESTYLE GOALS, THE NEXT STEP IS TO GET YOUR INVESTMENT PORTFOLIO IN PLACE. WE’LL HELP YOU IDENTIFY THE RIGHT TYPE OF INVESTMENT OPTIONS SUITABLE FOR YOU.

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Are you being forced to dip into your pension pot get through the pandemic?

If you are over 55 and considering accessing your pension it is essential that you receive professional financial guidance to enable you to make an informed decision. If you get it wrong, you could end up with a large tax bill.

Needing Money after a change in circumstances? Here are our top 5 things to consider before withdrawing money from your pension:

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ISA – Don’t miss out on this year’s tax-efficient opportunity

If you have cash savings or are investing, there is no reason not to use an ISA tax efficient wrapper. The end of the 2020/21 tax year is Monday 5 April 2021, meaning that if you’re planning to use this year’s ISA allowance you need to act fast – there’s no rollover from one tax year to the next.

We’ve answered some typical questions we get asked about how best to use the ISA allowance to help make the most of the opportunities as this tax year draws to a close.

“An ISA is a tax-efficient way to invest because your money is shielded from Income Tax, tax on dividends and Capital Gains Tax. Individual Savings Accounts (ISAs) have been available since 1999. The proceeds are shielded from Income Tax, tax on dividends and Capital Gains Tax.”

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Generating income from investments throughout your retirement years

The time has finally come, you’re ready to retire. You’ve worked hard all your working life to save and prepare for your retirement, but how should you approach investing now that you’re no longer earning a salary? When it comes to investing in retirement, even during volatile markets, the right strategy can help make sure your retirement savings last.

For many, the idea of retirement means getting away from the stresses of everyday life. But with living costs rising and interest rates low, retirees still need to think about how they can continue to generate income from their investments throughout their retirement years.

It is not unusual for people to live more than 30 years once retired, due to increased incentives to quit work early and rising life expectancy, which in itself can present a major risk that retirees may outlive their savings. The longer the time spent in retirement, the harder it becomes to be certain about the adequacy of your assets.

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Lasting Power of Attorney – peace of mind that there is someone you trust to look after your affairs

A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint one or more people to make decisions on your behalf during your lifetime. The people you appoint to manage your affairs are called the ‘attorneys’.

An LPA is a completely separate legal document to your Will, although many people put them in place at the same time as getting their Will written, as part of wanting to plan for the future.

During your lifetime
Once you have an LPA in place, you can have peace of mind that there is someone you trust to look after your affairs if you became unable to do so yourself during your lifetime. This may occur, for example, because of an illness, old age or an accident. Having an LPA in place can allow your attorney to have authority to deal with your finances and property, as well as make decisions about your health and welfare. Your LPA can include binding instructions together with general preferences for your attorney to consider. Your LPA should reflect your particular wishes so you know that the things that matter most would be taken care of.

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