What New Investors Need to Know about building an Investment Portfolio

Ankur Ghosh, Founder & CEO, SSV Capital Ltd., shares wealth building tips for New Investors

Have wealth that you would like to grow? In today’s financial world, investment portfolios are one of the most popular ways to grow your wealth – whether you create and manage your own investment portfolio or choose to invest in an existing investment fund.

Building a new investment portfolio

An investment portfolio is a group of investments held by an individual or institution. The goals of an investment portfolio are to maximize returns, minimize risk, and comply with the investor’s financial objectives. The assets in your investment portfolio can be classified as equity (stocks), debt instruments (bonds), or cash.

Investors’ interest rate sensitivity is determined by their time horizon: the number of years they expect their money to remain invested before they need it.

A long-term investor usually has a high degree of interest rate sensitivity because he/she may need access to the capital at any time during the year; whereas less frequent transactions may not warrant having funds available for immediate withdrawal at all times.

What should you invest in?

New investors would be wise to seek advice before making their first investment.

It is possible to invest all your wealth in a particular sector, e.g., property, start-up businesses, fintech etc. or to build a diverse portfolio of investments. Diversification within one sector or across multiple sectors is the key to reducing investment risks.

Whichever sector you choose, increasingly, modern investors are choosing to place their money in ethical investments by investing in organisations which prioritise ethical, social, and governance issues. Not only are these investments better for the environment and for the society, they, as research shows, also reduce risk and often offer better returns.

It is also wise to spread your risk by not placing all your investments in a single location or product – adding diversity reduces risk.

How to build your own investment portfolio.

  • Identify your goals.
  • Determine your risk tolerance.
  • Choose the right mix of investments for you.
  • Invest in a variety of assets, including equities, bonds, and cash.
  • Use diversification and portfolio management strategies to maximize returns while staying within your financial risk profile and suitability levels.

Investing in an investment portfolio fund

While similar to the prospect of sitting like Theo Paphitis in Dragon’s Den, deciding to invest in new ventures may seem appealing, in reality, managing your own investment portfolio is a complicated process. Without experience or specific market knowledge, it can be risky for first time investors – despite your best efforts, the value of investments can go down as well as up.

It’s critical that investors understand all aspects of their portfolios so they can make informed decisions about how those investments are managed going forward, and new investors keen to build their own portfolio should always seek professional advice.

An alternative and easier option is simply to invest in an existing portfolio fund, where professional asset managers manage a large portfolio of investments on behalf of multiple clients – and you simply enjoy a share of the returns.

SSV Capital is a good example – the company runs several investment portfolios to help clients grow their wealth, helping to make the most out of their money even in the current complicated financial market. With a diverse portfolio across high growth sectors, including banking fintech, funds, and real estate, there is strong potential to grow your income in a safe, strategic way whilst minimising risk and prioritising ethical investments.

Conclusion

In the end, investing is a personal choice. You can choose to invest in any number of ways, but at the end of the day it comes down to one thing: what works best for you.

You should consider all your options carefully before deciding on an investment portfolio that meets your needs and goals.

 

About the author

Ankur Ghosh is the Founder & Ceo, SSV Capital Ltd.  SSV Capital offers fixed income investments to investors that qualify as high net worth or sophisticated. If you feel you qualify, and would like to explore our range of investment opportunities click here