Whether you are new to investing or already have an investment portfolio, it is always a good idea to take the time to do your research. Financial planning is a complex topic, but there are a few fundamentals to consider.
Before you invest, it is essential to consider your objectives. For example, you may simply want to invest for retirement. If you have no immediate plans to purchase a home or make significant purchases, consider what goals you are aiming to achieve with your portfolio. An investment company will manage these funds for you, and you can select how aggressive or conservative you want to be according to your risk tolerance with the guidance of an experienced financial adviser. Learn more in our Simple Guide to Investing in Australia:
Your Guide to Investing in Australia
Today, let’s explore the best practices for investments. Here’s what you need to know:
Create a Financial Plan
We can’t stress this enough. Whether you invest in shares, bonds, or mutual funds, they should be part of a larger financial plan. If you don’t know what you are investing for or don’t have a solid plan in place, you may be at risk of making poor choices when investing in Australia.
Working with a professional financial adviser can help you set a plan in place for your personal circumstances. Your financial adviser can help you evaluate your goals and risk profile and then make recommendations. Don’t overlook other factors in your life that might be considered in your financial plan. For example, if you are looking to save for a home, a financial adviser will help you figure out how much you will need and best allocate your money to have the most significant impact.
Review Your Investment Portfolio Regularly
If you have a financial plan in place, it is essential to review your investment portfolio regularly. Check on how your fund is doing and the holdings in your portfolio. You don’t want to be blindsided if your financial plan changes. This can happen a lot. For example, if you plan to retire in 20 years, there is a chance you will live past that plan. If your financial plan changes, you may need to adjust your investment portfolio.
Check on Your Costs
When you are investing, it’s essential to consider the costs associated. If you are investing via a mutual fund or share trading account, check to ensure that the fees are competitive. While you can have success in the long-term with higher-cost funds, lower fees mean a higher overall net return for identical parcels of investments. While it’s impossible to predict the future, you can make a more educated guess by staying away from the higher-cost funds.
Be Cautious of Your Investment Risks
While it is essential to be careful in how much risk you take, you should also consider the investment timeline. For example, if you are investing for retirement, your tolerance to risk will vary depending on how close you are to approaching retirement. The closer you are to retirement, you typically want to decrease your risk exposure to protect your nest egg. Know your investment timeline and do your homework on the potential investment.
Investments today can be daunting, but it is not difficult to pick out the funds that will work for you with a little bit of research. Make a plan, check in on it regularly, and be cautious about your risk. Whatever your investment plans are, it is essential to consider where your investments are going and ensure you adequately diversify your portfolio.
Invest Wisely, Trust the Experts!
Formulating a plan for your investments is an essential first step. After that, check in on your portfolio, and consider the account fees you are paying for trading within and maintaining your investment portfolio. You can also consider if you want to take on more risk or if you want to be more conservative. As long as you have a plan and keep your risk profile in mind, you can develop a solid, diversified investment portfolio.
If you are looking for reliable and professional financial advice in Sydney, we can help you. At Sydney Wealth Advisers, your experienced financial adviser will work closely with you, selecting suitable strategies to give you peace of mind that you can have the ability to finance the lifestyle you desire. Book online or call us today to secure your complimentary first meeting!
DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.