Lump Sum Investments

If you have a lump sum to invest you face a dilemma. Whether the cash has arisen through hard work, financial prudence or plain good fortune the purpose of the exercise is firstly to protect the capital and then, hopefully, to make it grow.
 
The nub of the problem is that in a period of low INFLATIONINFLATION
The amount, expressed as a percentage, by which prices rise or fall year on year. and low interest rates, bank and building society deposits offer relatively derisory returns which serve to do no more than keep the money safely parked.

A small amount of income will accrue every so often, but the capital does not rise in value whatsoever. In real terms, therefore, the capital is systematically eroded in value by the prevailing rate of inflation.

For people who have always held their money on deposit at the bank, buying SHARESSHARES
If you own shares in a company you are a part owner of the company, entitled to vote at annual meetings and benefit from the company’s profits. These are distributed in the form of a dividend. can seem a daunting prospect.

But investing a lump sum does not automatically mean that shares and the stockmarket have to be involved. There are many alternatives available.

The answer to investing a lump sum without getting badly burnt lies in first deciding how much RISKRISK
Refers to the fact that the value of your savings and investments can fall as well as rise. Some savings and investments (direct investment in equities, for example) carry greater risk than others (such as a deposit account with a bank or building society). you are prepared to take and secondly in building a portfolio which has a range of different investments.

In order to find the right investment vehicle for your money, please take the time to get good independent advice. Contact us for a free initial consultation to discuss how we can help you manage your investment portfolio.