When did you last review your investments and wider finances?

In today’s climate of persistently low interest rates many investments, particularly those providing instant access on cash deposits, pay interest rates well below current inflation that measures 2.4 per cent according to the Retail Price Index. Even long-term and fixed-rate investments are paying interest rates much lower than their historic averages. As a result, allowing for inflation, savers are being offered negative returns.

Although many share indices are at a respectable level, equity markets in general are benefitting to various degrees from central bank support and low-level interest rates as well as quantitative easing, which is roughly equivalent to printing money in order to support economic recovery.

So it is crucial to review your portfolio regularly, paying particular attention to any investments that have been held for many years. It is important to review not only the performance over time of investments, whether they are held in cash or in stocks and shares, but also the value of any dividends you are receiving. You should also take care not hold too large a proportion of your overall portfolio in any one investment but to manage your exposure to the risk of underperformance – in other words, do not place all your eggs in one basket.

It is also worth considering any lifestyle changes that may be on the horizon. If you plan to retire within a short space of time, a lower-risk investment strategy may be more suitable for you. Alternatively, if you are young and earning a good salary, an emphasis on capital growth may be more appropriate.

Investment decisions rest on the question of suitability for individual investors – no two people are the same. For example, are you using to the full all your tax allowances?

It is wise to conduct a detailed portfolio review at least every few years and the more complex your investments are, the more often frequently you should review them. If you require professional help, it is also important that you seek reputable and impartial advice for a fee rather than relying on financial salesmen looking to sell you investment products on commission.

If you would like to discuss developing a strategic investment portfolio with financial professionals who are committed to promoting your best interests, the George Ide wealth management department is on your side. Contact our team on 01243 786668 or email us at [email protected].

John Atkinson. Chartered Wealth Manager

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