Investment Planning

Investment planning strategies are crucial to the success of any investor, uncertain economic forecasts and turbulent economic conditions leave no margin for error when choosing investment tools to whether financial ‘storms’. Choosing the right investment portfolio for investors is of paramount importance as it can mean the difference between thousands and millions of rands over time. Two basic concepts for any investor to think about when planning for the future are the simple concepts of risk and return; however costs and taxes are also factors that should never be ignored as they too play an important role in the investment planning process.


Every person has a different appetite for risks in their personal preference, however other factors can also play important roles in the levels of risk that investors are exposed to. These factors include subjects such as age, time till retirement, liquidity of the market at investment maturity and throughout, volatility, inflation, interest rates, investor goals, unexpected events and differences between asset classes.


The second factor to consider before drafting an investment plan is the differences in return over different asset types. Usually the case is that with greater returns come greater volatility. However when choosing funds financial planners can diversify most of these systematic risks (e.g. market volatility, interest rate changes, etc.) away to optimise safety and returns for investors.


Being fee sensitive is very important since high fees can negate the benefits of return. Active management, which tends to have higher fees, should not be the only part of your overall portfolio. Choosing funds with relatively low Total Expense Ratios is an important when choosing a fund selection or combination.


Taxes need to be considered when making investment decisions, so understanding the tax impact should be taken into account. Tax loss harvesting should also be incorporated when possible.


Investment tools available through Beta Wealth are listed below:


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