Measuring Risk

In taking risks to increase your chance of getting higher returns on your money there is no guarantee you will make a profit or even get back the same amount you invested in the first place.

Hazards can be listed as: credit risk; market or investment risk; liquidity risk; no dividend income; capped returns; averaging; limited participation; inflation; and the tax treatment of structured products – all too complex to be dealt with here.

Ask a Peter Male Adviser to explain risk in more detail. Risk and volatility are factors that will be taken into account as well as possible returns when we shape your investments to suit you.

Investments & Investment Planning

Investments are different from savings – they are usually designed to be held for a longer term, usually ten years or more, in the hope that they will earn a good rate of interest for you. Fundamentally, you take a risk with your money by investing in assets that could rise or fall in value.

There are lots of different types of investment – ISAs, shares, property, unit trusts – each with its own level of risk and way of working, and it's advisable to spread your risk by investing in more than one of them.

There are levels of investment, beginning with the underlying investment, or 'asset class', which broadly covers cash, bonds, shares and property. You can invest in each of these directly, playing the money market or becoming a landlord.

Pooled investments are where your money and money from other investors is invested in one or more of the asset classes by an investment company. Not so hands-on, this can help spread your risk and save on costs. Open-ended investment funds, investment trusts and life assurance bonds are the most common pooled investments.

Tax wrappers are tax breaks that you wrap around your underlying or pooled investments, shielding them from some or all tax. ISAs and pensions are two of the most common tax wrappers.

Structure Products

Structured products offer returns based on the performance of underlying investments, possibly involving different firms based in various countries.

They are often linked to a stock market index such as the FTSE 100 or the price of another asset, such as oil or gold.

Offering income, capital growth, or a combination of both, most structured products are likely to be open to new investment for a short while, tying up your money for between one and ten years. Structured products vary widely, offering anything from full capital protection to partial or no capital protection.

Structured products are generally complex and government advice is to seek professional guidance if you are in any doubt about the potential risks and returns involved.