On to long term investments

Well, I chatted about life insurance more than anything else in the prevoius blog, and I'd like to move onto investments today.

What client's dont understand with long term investments is that the portfolio that is chosen is not guaranteed to perform at the rates which they are predicting. This is where financial planners come in. When you take out an investment, you will be assisted in chosing an investment portfolio, a vehicle made up of underlying assets which are baskets of investment in various elements of the market.

There are so many portfolio's ranging from high risk to low risk, low risk being more smoothed portfolio's which give an average growth, holding back high growth in times of good performance, and topping up in times of low performance, in essence smoothing it to have a balanced, but generally low performance, this is a safe option.

When you choose a portfolio at the start of your investment it may be one which is doing particularly well at the time, however these portfolios do not stay level, and can fluctuate even into negative percentages. This is why it is imperitive for you to visit your financial planner at least once a year, to evaluate your financial portfolio as a whole. Revisit your choice of fund selection and possibly switch to a different fund provided it is at the right time. What clients often do when thier investment policy takes a dip is cancel, this just chrystalises the losses and you end up losing instead of trying to recover.

People often just have a once off relationship with thier financial planners, but rather compare it to a doctor. You make an appointment with your doctor when you need to, or for your check up, the same goes with your financial planner. Make an appointment with them once a year, they are there to help, build a relationship and keep in touch.

Remember also that when your portfolio which you have chosen performs badly, it is not the insurer's error. Each fund which is designed and set up for investment is approved by all the necessary authorities and cannot be unitlaterally altered. There is a mandate to each fund in which the fund managers can make small changes but they cannot change the whole make up of the fund. Exactly the opposite can happen that if they do, people may be furious that the fund was changed compared to what they originally chose.

This is why it is important with the aid of your financial planner to keep tabs on your investments, dont take out a policy and forget about it until it matures. Monitor it, chat with your financial planner and make it work. Your financial planner is there to help you and advise you, but ultimately it is your own investment to manage.

Till next time.