Cheetham Jackson - Smart Investment

8 SMART MONEY We believe that successful investing is achieved by asking a different, more relevant question: “What rate of return do you need to achieve your goals?” Generally speaking, the lower the rate of return required, the lower the degree of risk needs to be taken.We recommend you never take more risk than is necessary to achieve the rate of return you require. Reduce risk and improve returns What are your goals?You may want to help pay for your child’s education, for example university fees in 10 years time. Or you may wish to plan for a comfortable retirement, providing an adequate, rising income for the rest of your life. We all have specific goals or aims in life, and writing them down will help you define and prioritise them. So, we recommend you write down your specific objectives, the timescales involved, and the levels of return required.We also advise you to prepare a budget, so you know how much your income and expenditure are.You may be surprised that with care, you can begin saving regularly from the start, and the benefits of regular investing cannot be over-emphasised. Focus on your goals There’s a well-known saying:“Fail to plan and you’re plan- ning to fail”.We agree whole-heartedly and as you begin to implement your plan you will begin to succeed. But that’s just the first stage. You also need to stay focussed and make sure your plan remains ‘on-target’. Like the journey from start to finish, we recommend you keep to the planned route, and resist the temptation to make a diversion. You may see an investment that appears to offer outstand- ing returns, or receive a special ‘limited offer’ that is only avail- able for a week or two. Be careful, and be wary. Such offers are designed to get your attention, but rarely fulfil their initial promise. By being disciplined, having a plan, and sticking to it, you can avoid the dangers of diverging from your planned route and possibly wrecking your financial security. On long-haul flights covering thousands of miles, aircraft can be subject to head-winds, cross-winds, changes in air-pres- sure, and sudden and, sometimes, extreme turbulence. Such phenomena can cause the aircraft to be blown off-course, delay the arrival time, and require the pilot and crew to constantly monitor and correct the aircraft’s flight plan, to ensure the final goal is reached. It’s just the same with your financial plan. Even the best plans will need constant monitoring, adjustments, corrections and high levels of professional expertise to ensure the goal is reached.Your financial planner is like a pilot, trained and qualified to ensure you arrive at your planned destination. Both investor and financial planner need to regularly review, correct and monitor progress. By staying focussed and working as a team, your financial planner will earn his fees, and you will attain your financial goals, safely, and on time. Staying focussed Investors are often asked:“What level of risk are you willing to accept?”