The Personal Wealth Management Service

The Financial Review Service

Financial Planning - The Choices Service

Portfolio Management - Key Facts

Portfolio Management - Key Facts

Portfolio Management

The investment approach will be determined by various factors, including:

· The level of return required to achieve stated lifestyle objectives

· The timescale for investment

· Short term cash requirements

· Identification of an acceptable level of investment risk

It is a fact that virtually all wealth and financial planning strategies by definition include an element of risk.

Although investment risk means different things to different people, it is important to appreciate the various types of risk and these can generally be summarised as one or more of the following:

· absolute – the risk of capital values falling

· inflation – the risk of value, both income and capital, being eroded in real terms

· lifestyle – the risk of money ‘running out' and not being able to achieve lifestyle objectives

· opportunity cost – the risk of ‘missing out' on higher investment returns

It is very important to understand the level of risk involved and the impact this may have on finances and lifestyle. For most, an element of risk is unavoidable if realistic expectations are to be achieved.

By adopting an agreed asset allocation strategy, it is usually possible to manage portfolio risk whilst increasing the chances of achieving the level of return required to meet financial and lifestyle objectives.

Portfolio rebalancing is a useful discipline, in that it should enable investments that have increased in value relative to the benchmark to be ‘sold high' and holdings that are lower than the benchmark to be ‘bought low'.

The County Partnership Investment Process is available on request.