It is never too soon, or too late, to start investing in your future.

Creating and managing an investment portfolio doesn’t need to be time consuming, costly and boring. It should be fun and exciting!

Here are some things to consider before you start investing!

1. Know what you want

We usually find that there is something – a goal or objective – that triggers your desire to start investing. It may be buying your dream car, saving for a home deposit, going on a holiday or saving for your children’s future.

Determining your reason for investing will help you to make decisions for your investment portfolio that are right for you.

For your investment goals, you should determine:

  • How much do you want to invest initially?
  • For how long do you want to invest?
  • Will you make regular additions to your investment portfolio?
  • What return do you require from your portfolio?

2. Know where you stand

Before committing your money to an investment portfolio, it is important to ensure you are in the position to do so.

It is a good idea to maintain a level of cash in a readily available account to meet any short term expenses or in case of emergency. This is important to avoid needing to access the funds in your investment portfolio at unfavourable times. The amount you set aside for emergencies is up to you but we generally believe 3 months’ worth of expenses is a great place to start!

Debt is an important factor to consider before investing. It is very important to understand what your debt is costing you to determine whether you should pay down debt or invest. Furthermore, you need to consider any taxation consequences on your investment earnings.

3. Know your risk

Investment carries risk. Generally, the higher the risk, the higher the return – although this isn’t always the case!

Growth assets, typically Australian and international equities, and property have the potential to deliver higher returns over the longer term but are generally more volatile than more defensive assets. Investing in growth assets should be for the longer term to allow your portfolio time to weather positive and negative return periods to come out with a healthy average return.

Defensive assets, typically cash, term deposits, bonds, hybrid securities and mortgages, are less volatile and generally deliver lower returns than growth assets. These assets are a great tool to add security to your overall portfolio or for shorter investment terms.

It is important that your “eggs,” or investments, are spread across multiple “baskets,” or assets, to avoid being adversely affected in the event that one of your baskets is impacted by one or more different risk factors. All assets have different factors that affect them, and therefore they should be considered together.

Without professional financial advisory, it may be hard to determine how your investment portfolio should be allocated to each asset and asset class. It is important to get this allocation mix correct so that you don’t find yourself panicking and redeeming your portfolio in the midst of unfavourable market conditions.

Are you ready?

If you think that you are ready to start investing to reach your goal or objective, or if you are still unsure if an investment portfolio is right for you, contact us for a further discussion!


Please note that the above information is general in nature and does not consider your objectives, personal or financial situation and needs. You should consider the appropriateness of this information in regards to your objectives, financial situation and needs before acting. Any projections provided are illustrative only and none of the projections or underlying assumptions should be taken as implying any indication, assurance or guarantee that those assumptions are correct or exhaustive. Due to unknown risks and uncertainties, actual performance and results may differ materially from the projections.


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