Weather forecasters talk about risk. You can always catch one of them talking about a risk of a shower today, tonight or tomorrow. But a ‘risky’ situation denotes a chance of a loss. Investors dislike losses more than they like gains.
Investments are to be considered as long term. Different investments have different jobs, things they do, their own purpose. Like tools in a tool box, each investment performs a certain function to help each client reach their financial objectives. Trillium’s role will be to determine and advise which investment is suitable to help them achieve their financial objectives.
Some of the different investment options that Trillium Financial Services deals with are:
- Bonds/Fixed Income
Types of Investments:
- Stocks / Shares
Risk is a fact of any investment. You cannot rid yourself of it, but you can manage it. The client’s financial plan can have parameters in place to take on less risk than average, more risk than average, or the current market model. Assessing and establishing the client’s tolerance of risk is main factor in developing their financial plan.
Sometimes clients want to take on risks but do not have the ability to take on those risks. For example, someone at retirement receives a lump sum of 100,000 and wants to invest 100% of the lump sum in stocks. If the investment were to incur enormous losses, it would be a devastating situation for their planning for retirement. This is an example of someone who is willing to take on higher risk but does not have the ability to recover from extreme losses from taking on extra risk.
Another perspective of risk tolerance is someone in their 20s that receives a lump sum win fall (i.e., inheritance, gift, bonus, winnings, etc.) and does not want to invest in stocks but rather choses an investment with little to no risk. This person has the ability to recover from losses over their remaining working years, but he/she is not willing to take on high risk investments even when he/she has more ability to do so compared to someone close to retirement.
There are two factors to take into consideration when determining your risk tolerance.
- Ability to take on risk
- Willingness to take on risk
Things you should be considering in your investment goals:
Proper asset allocation arrives from setting the appropriate length of time for each investment.
Consideration of the tax burden of any investment should contribute to the overall financial goal.
ACCESS TO FUNDS
Availability of income or capital from investments delivered in accordance with client’s time table.
Contact us today to review your investment goals at 01 442 9950 or email us at James@Trillium.ie.