Protecting your Nest Egg
Investors searching for decent returns with guaranteed capital security have few options available to them.
Gone are the days when investors had a range of capital secure products like high deposit interest rates and generous bond yields. In fact, deposit rates today are practically zero and some banks are even charging their clients to leave money on deposit. Government bond yields have also collapsed, offering less than 1% in most cases today.
This new reality has not changed people’s attitudes towards security though. We know from Surveys that over 40% of people surveyed ‘What level of Risk they want to take’ and 40% have said that they want to take no risk at all.
Unfortunately there really aren’t any products out there for investors who want guaranteed capital security with a reasonable rate of return. This all comes back to the super low interest rates on offer from the banks. Capital security offers zero returns.
With the onset of Brexit making long term planning difficult and adding to the overall uncertainty, investors cannot even be sure if UK Government bonds are secure for the medium to long-term.
So what is the Solution to this delima?
Diversity is Key
Diversity should be key to managing your savings and investments portfolio. These assets can include commodities, property and other securities which are not correlated to the stock market. The way we choose these assets is by looking for growth assets across various asset classes that can give equity type growth levels over the medium to long-term.
Another key element in managing your savings and investments portfolio is managing volatility. Volatility management is used when there is a lot of volatility and the chances are that it will continue then there are mechanisms in place to move from risky to more stable long term assets in order to respond to this volatility. An investor who is aware of these trends can make these adjustments themselves once they have completed their research and found something suitable to match their long term goals.
Renewable energy offers assured annual returns over a long term period which helps to offset any risk or volatility in the marketplace.
There are many things to bear in mind when investing, what information do I need to provide in order to proceed, what resources do I have, what are the risks involved.