As Financial Life Planners Enable’s IFA in Bishop’s Stortford know the old adage for investing well, don’t put all your eggs in one basket’. For long term gains from any investment it is always wise to spread risk and try and diversify across a range of companies, asset classes and geographical regions.
In wealth management there are a ‘traditional’ set of asset classes to make the most of; cash, equities or shares and bonds. There are also a host of ‘alternative’ asset classes that have become much more available to private investors which include commercial property and private equity trusts. Many wealth management companies now use financial wraps to help further mitigate risk but maximise long term gain.
None the less it is always helpful to know some of the terms to understand better the asset classes involve in your wealth management. So back to basics a share (often referred to as equity) is a unit in a company listed on a stock exchange. If a company is worth £100 million and has issued 100 million shares then each share is valued at £1. The overall value of the company fluctuates based on a variety of factors including demand and supply for the goods or service the company is offering, merger and acquisition activity, competitor activity and the economic environment to name a few, all of which can impact the share price.
Investing in shares can have good long term returns – equities have historically delivered better returns over the long-term than other asset classes such as bonds or cash. But equally there are risks by their very nature stock markets fall. Typically investing in the stock market should be taken as a ten year view, Enable’s IFAs can help you see what is right for you.
Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE