Investment Portfolios
Investment Portfolios
Explained
Investing your money in an investment portfolio can be a daunting task, particularly within the current economic climate. If you have assets you’d like to invest, Brite can help you.
We’re leaders in the financial industry, working together with people to make sure they get the best out of their funds. There are three main financial services we offer:
- Pension administration
- Advisory services
- Asset management
If you’re interested in investing in a model portfolio or simply finding out more, fill in our contact form today and we’ll be in touch!
What is an investment portfolio?
An investment portfolio is a term used to describe the different financial investments that you might have, from shares all the way through to housing properties and bonds.
Essentially, an investment portfolio is a way to manage a group of assets, combining everything under one roof. If you have money saved or invested anywhere, there’s a good chance you will have a portfolio of sorts.
Spreading your assets into different investments creates what is known as a ‘diversified portfolio’. You might even have more than one portfolio if you invest in different places.
When investing, you can usually choose the level of risk your portfolio has:
- Low-risk investment: Whilst the market can be unpredictable at times, a lower level of risk in a conservative portfolio usually means you’re less likely to lose your money. However, your gains will generally also be lower too.
- High-risk investment: The higher the risk, the more likely you are to lose your money. However, with this added risk, there is a greater opportunity for the investment to generate higher returns if everything works out positively.
What risk level you choose will depend on your personal situation – if you decide to go for a high-risk investment, you must be prepared for the possibility that you might lose some of your money in the process.
Whilst you’ll usually have a financial advisor to manage your investments, it’s a good idea to learn the basics of how your investment works and where your money is being invested, giving you a greater degree of control over your assets.
Why do people choose to invest their money?
The main reason why people choose to invest their money in an investment portfolio is due to the expected returns from doing so. Whilst putting your money into a normal savings account might be safer at times than investing, the returns are typically lower. If you want to save up a greater amount of money, investing in different funds can be a worthwhile venture.
The interest rate on savings accounts varies, but it has typically been fairly low of late. The Bank of England has recently raised interest rates in the UK several times due to the current economic issues the nation is facing, but those rises haven’t transferred across to savings accounts. This means that the interest level on most savings accounts will not bring generous returns.
Because of this, investing money is often a more lucrative way to earn from your savings. If you want to save for retirement, you’ll likely need to start putting extra money aside, as well as the amount you’ll pay into your work or state pension. By investing in different areas, you can create a diverse portfolio of options.
Questions have been asked recently about the UK state pension, with the state pension age gradually increasing over the years. Having an extra source of income – such as an investment – means you won’t have to worry so much about your future financial situation.
What is a model portfolio?
At Brite, the main investment option we offer is called a model portfolio. A model portfolio allows investors to see the direction in which their portfolio is going, giving them greater freedom and choice over it.
The main advantage of investing in a model portfolio is that it uses a system in which the investor’s assets are continually managed by a team of investment managers. This major benefit has led to its continued popularity amongst individuals who don’t have the time nor expertise to manage their funds independently.
In setting up a model portfolio, a set of asset classes is recommended for the investor based on:
- The risk level chosen
- The amount of investment agreed
- The current economic climate
These portfolios are managed and rebalanced by a team of investment managers over time, keeping an eye on the changing economic market and the personal and financial circumstances of the client.
You’ll usually go for a diversified portfolio of managed investments, merging asset classes and strategies together to enhance this.
A variety of portfolios may be offered to you, giving you more choice over how your money is invested. As a model portfolio is managed by a team of investors, this allows you to have minimal input into your investment, so you can spend your time more wisely.
A diversified portfolio gives the investor more peace of mind over the situation, without having to sort out all the investment nitty-gritty themselves. A model portfolio is a fantastic way to invest, but it’s important to do your research first so you know what to expect.
Our model portfolio system
At Brite, we offer a range of investment solutions to serve individual needs. At every step, we are committed to ensuring that we help you to achieve your long-term financial goals. We will provide you with an adequate mix of risk assets to reduce costs and provide diversification, giving you all the security you need when making an investment.
If you’re a UK expat living abroad (so long as you don’t live in the USA), we can offer you an investment account in any of the following currencies: GBP, USD, EUR, and AUD. A range of risk assets and portfolios is available, with each investment decision based on your own personal circumstances.
If you live in South Africa, our model portfolios are a little different and you can only invest with GBP and USD. We also take advantage of ETFs (exchange-traded funds) from the universe of allowable Collective Investment Schemes (CIS) in South Africa. To find out more about how we can invest for you, contact Brite today!
What are the benefits of using a model portfolio?
There are many benefits to using a model portfolio for your investments, which we’ve laid out below for your consideration:
- Professional analysis and investing – When you invest in a model portfolio, your investment is looked after by a group of fund managers, with knowledgeable experts designing your fund. Because of this, you can rest assured that your money will be looked after – the expert team at Brite has been working in the financial world for decades, so we know what we’re doing.
- A diversified portfolio – You can diversify your assets with a model portfolio, which helps to reduce risk by spreading your money across a range of asset classes. This can also help to maximise your potential returns along the way.
- Affordability – Model portfolios can be much more affordable than investing in other schemes, especially when compared to traded funds or comparable mutual funds.
- Active monitoring and rebalancing – With a model portfolio, your financial advisors will monitor your investment, changing it every so often if they find that it is not performing as expected. They’ll also rebalance your portfolio – this is when the percentage of the portfolio invested in each asset is adjusted in order to increase your overall gains.
What you need to be aware of when investing in a model portfolio
Despite the obvious advantages of investing in a model portfolio, there are several important factors to consider before making the decision to invest.
Naturally, you should get as much information as possible before making any major financial decision, making sure the process is right for your financial circumstances.
Inflation refers to the rate by which prices increase over a certain period of time, linked to the cost of living. Its rate can greatly affect your financial outlook, wherever you choose to save your money. As such, inflation must factor into your decision making prior to investing. In 2022, the UK (as well as many other European countries) finds itself in what has been dubbed a 'cost of living crisis', which has seen inflation rise heavily. When choosing to invest, you need to take the current economic situation into account, as well as considering how inflation could potentially rise in the future. Of course, if you choose to invest in a model portfolio with an experienced fund manager like Brite Advisors, your money will be in good hands, but it's still something you need to think about.
As the economy can be unpredictable, you shouldn't invest more than you can afford to lose in case the markets do take a downturn. Always make sure you have money set aside from your investments that you can use in case an emergency arises. It’s worth setting an emergency fund of at least 3 months' worth of living expenses aside to account for any unexpected payments. If your country of residence does enter into a recession, you need to ensure you have other money set aside to tide you over in the meantime.
What you need to be aware of when investing in a model portfolio
Our team has been working within the financial markets for decades, providing specialist investment expertise across a number of different fields. Because of this, we’re highly experienced and able to suitably invest your money using our diversified investment portfolios.
As well as our range of model portfolios, we also offer a selection of pension options, allowing you to truly diversify your investments to get the most out of your assets.
If you’d like to find out a little more about what we can offer you or you’re ready to get started in the investment world, fill in our contact form and we’ll get in touch!
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