Lump sum investments
It is always advisable to have access to a sufficient deposit fund, as a financial safety net, in case of emergency and unforeseen financial setbacks. Once you have an adequate emergency fund on deposit, you may want to consider other options with regard to additional savings built up over the years.
One alternative to keeping discretionary monies on deposit is to make a lump sum investment with an investment company. While a deposit account will produce a stable return, these returns will be limited and may not keep pace with inflation.
Higher returns may be achieved if an investor is prepared to accept some risk and uncertainty. So, less predictable investments such as equities, offer the prospect of higher returns over the long term whilst more predictable investments, such as deposit accounts, offer lower returns. Equities will exhibit more volatility and your investment time horizon should be a minimum of five years.
Reward & Risk
Over the long term, equities usually comfortably outperform less volatile assets such as cash. You may access the equity markets by placing your lump sum into an investment bond. Within the one investment bond, you then allocate your investment into the fund(s) of your choice, thereby creating the investment mix appropriate to your individual risk reward profile.
However you need to be aware that your capital is not guaranteed and at maturity, you could receive an amount less than your original investment.
Benefits of a lump sum investment:
|√ Wide choice of funds
|√ Liquidity & easy access
|√ Opportunity to generate a real return to combat inflation
|√ Can be tailored to suit individual risk profile
How abm financial advisers can help
- We begin with a detailed fact find to establish your financial strengths, weaknesses, opportunities and threats.
- Matching your stated appetite for risk to an appropriate product.
- Regular evaluation meetings to review your financial performance versus target and to discuss changes in your world, our world and the world.
- Access to a wide range of award winning investment fund managers.
How can I get further information on lump sum investments?
For further information on taking out a lump sum investment, email us.
|Warning: The value of your investment may go down as well as up.