A financial investment strategy is a created set of rules, behaviours, and procedures, designed to guide an investor’s selection of investments within their portfolio. People have different profit, growth, and income objectives, and their individual skills make different tactics and strategies appropriate. The difficulty that most people face when investing isn’t necessarily finding an investment strategy, but finding the right investment strategy for them, and applying the right tactics to execute their plan.

The difficulty that most people face when investing isn’t necessarily finding an investment strategy, but finding the right investment strategy for them, and applying the right tactics to execute their plan.

 

How can a financial adviser help me to develop an investment strategy?

One of the first actions that a financial adviser will take with you will be to determine your risk profile.Naturally, people of different ages, backgrounds, and experience will all view investment risk differently. It is our job to help you to determine how much risk you are willing to take while striking the right balance so that you feel comfortable with the investments that you have. Diversification is important concept that manages risk, so finding the right balance of investments

The next step will be to recommend an investment mix that suits your risk profile. Below is a useful table from ASIC’s MoneySmart website that demonstrates different investment mix’s and the typical characteristics of these portfolio’s. If you have a superannuation fund, you will find that you already have a portfolio that’s allocated in a similar way.

risk-profile

 

The Prudent Investor Rule

Our financial advisers at Life Balance are required to follow what is known as the “Prudent investor rule,” which is a guideline that requires that we recommend investment assets as if they were our own. Our financial planners consider the needs of clients, their needs for income and the preservation of assets while avoiding investments that are excessively risky. The prudent investor rule asserts that the decision-making process must follow certain guidelines, even if the final result does not satisfy the original intent.

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