There is no shortage of magazines, media articles, internet-based guru’s and so on that suggest “best” investments. There are also thousands of advertisements that at least imply a particular investment is the best thing for you...
Each of these sources may be quite right in pointing out “good” investments, but none of them can tell which is the best investment for you as they know nothing about you and what you need.
What is best in an investment for any individual will be determined by many variables, including:
- The investors age
- The investment time frame
- The amount of money being invested
- What is the money going to be eventually used for?
- The level of income the investor receives from other sources
- Does the investor require income from the investment along the way?
- Locked or unlocked requirements?
- The investors attitude to risk
- Current investments already held by the investor
- The investors goals and objectives
- The investors current financial position, how much debt do they have?
- Unique personal circumstances (e.g. special needs children; dependent family members, etc)
When considering investments, there are generally four main asset categories, being cash, fixed interest, property and equities. The amount that is allocated to each category is calculated taking into account the factors identified above and differs for each individual investor. Within each broad category a investor has the choice of using “managed” products, or doing the investing directly themselves into specific (individual) investment products.
Within the managed funds area there are a number of different structures, including KiwiSaver and other superannuation funds, unit trusts, group investment funds and insurance bonds. Which investment structure best suits someone is dependant on factors such as those listed above.
To compound the problem of choosing the best investment is that nearly every investors needs and circumstances change over time – so there is often a need to factor in flexibility, liquidity and cost issues. Even after you have settled on a strategy, or set of products it is critical that it is reviewed regularly as circumstances change. A review on at least an annual basis is important.
So working out the best investment is not quite as simple a process as some would like to make out…and that is why professional financial advice makes a huge difference.
Call Jonathan York on 07 578 3863 to make an appointment to discuss what might be the best investment for you.
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