Shedding light on investments that make sense
We’ve all heard stories about a friend of a friend who made a fortune by investing in this or that. On the flipside we’ve all heard horror stories about a friend of a friend who invested everything and lost it all. It’s best to ignore those stories.
The business of investment can often come across as resembling something of a dark art, but at Eclipse Financial Solutions in Barnstaple, North Devon, we can shed some light, based on many years experience of giving our clients investment advice in Devon.
Calculating risk to make the right choice
There is no magic formula. There are risks involved in investments, which inevitably rise as the potential for higher returns on your money increases. However, the key to any good investment is taking risks that are calculated.
Are you a risk taker or do you like to play it safe? Understanding who you are and what you aim to achieve with your money allows us to guide you and form a balanced strategy for attaining your investment aims.
Give us a call and arrange an appointment and let us talk you through investment options including:
An Individual Savings Account (ISA) is held in tax free ‘wrapper’, allowing you to invest a certain amount each year (either as cash or a combination of cash and equity, stocks or shares).
A Unit Trust (UT), also known as a collective investment, allows you to buy an amount of ‘units’ in a larger managed investment fund that could include shares, bonds, property or cash.
An Open Ended Investment Company (OEIC) is a collective fund based corporation. Set up to react to the size of the fund and the stated criteria of investment it invests in a diverse portfolio.
Collectives refers to an investment in a collective fund (operated by a trust or bank) allowing your money to be pooled pooling with the funds of other investors, thus giving you a greater portfolio diversity.
Equities refers to buying stocks and shares in companies. Equities traditionally yield higher returns but come with greater risks (ie you can lose some, or all of your money).
An Investment Bond (CIB) provides you with medium to long term capital growth or an income, allowing you to take out withdrawals, periodically or in a lump sum.
Offshore is an option by which your money is invested in a jurisdiction that is separate to your country of residence you can benefit from tax efficiency, based on lower rates of tax or higher rates of return.
A Fixed Interest Investment is a low risk option compared to equities, which sees your money being loaned (either to the state or a company) for a fixed time, yielding regular fixed interest payments.
Investment Trusts are publicly owned companies that trade on the stock market and pool investors’ money. Your investment is in the form of shares bought in the company.
National Savings – Government backed National Savings schemes are seen as a safe place to invest money, offering options such as premium bonds and savings certificates.
Junior ISAs are a recent replacement for child trust funds, junior ISAs allow you to invest funds allowing long term savings that are tax free for children under the age of 18.
An Enterprise Investment Scheme (EIS) invests in smaller companies that are unquoted on the stock exchange, meaning that you qualify for tax incentives (income tax and capital gains tax reliefs).
A Venture Capital Trust (VCT) is a good option if you are a high earner, allowing you to benefit from generous tax breaks by investing in a VCT which invests in smaller companies that are unquoted.
Endowments With Profits – With this policy you are investing for a fixed period with an assured sum. Boosted with bonus payments on a regular basis that can be withdrawn at specific times.