RISK AWARE INVESTMENT GUIDE FOR EVERYONE

  Before you invest, make sure you fully understand the product disclosure statement (PDS)[93] and b eware of scammers offering investments or asking for payment using e.g. crypto-assets [94]. The PDS explains how your investment works, the risks, fees and charges involved, how long you should invest, legal and tax implications, etc. What kind of investor are you ? According to your FID discussed above, you may select either defensive or growth investment. Defensive investments include cash and fixed interest short-term investments. Long-term g rowth investments are higher risk and offer a higher potential return compared to defensive investments. They aim to give capital growth and some provide income ( e.g. dividends for shares or rent for property).     But what is the best asset allocation for your age? The rule of thumb used to be that you should subtract your age from 100 - and that's the percentage of your portfolio that you should keep in stocks. For...

  FID is the final stage of selecting and overseeing a group of investments that meet your long-term financial objectives and risk tolerance . The first step is to formulate your investment goals and constraints. Your goals should be SMART: specific, measurable, achievable, realistic and time-bound. Investment constraints can be of different forms: liquidity needs (how quickly you might need to generate cash), time-bound (need return over a specific time period), tax concerns (capital gains, income tax), personal preferences (ESG rating, etc.) and unique needs arising from your personal situation (e.g. buying a property). The second step is to construct the portfolio by implementing the investment strategy and deciding how to allocate capital across geographies, asset classes (like equity, debt, real estate and gold) and securities (stocks, bonds). The main objective of portfolio construction is to meet investor needs by taking the minimum possible risk. The traditional   ...