Investment Management Services to Underpin a Successful Portfolio
Since the earliest days of investing, investors have searched for low-risk, high-return investment strategies that will help them make their fortunes. It soon became clear, however, that successful investing is a complex activity which requires knowledge and endeavour, and there is no such thing as “no risk” investing.
Building a successful portfolio is difficult. This is why many investors seek professional financial help and wealth management advice to:
- Understand how portfolio investments can work to their advantage
- Ascertain their risk preferences
- Work out the most suitable balance of funds, equities and asset classes to suit their needs
After all, how do you decide between value and growth stocks or foreign and domestic stocks? Which assets are low-risk? These represent only a select few of the numerous choices on offer, and what represents the right portfolio choice for you today could be wrong for you in five years’ time and could be entirely unsuitable for another investor altogether.
There is no fool-proof way for any single investor to invest forever—your balance of equity, fixed income, cash and other securities will depend on some fundamental analysis of your personal circumstances. Plus, you will need the discipline to avoid myopic, emotional decisions and be able to balance this with the flexibility to respond to fundamental economic changes. This is often a struggle for self-directed investors.
Understanding Risk
Some level of risk is inherent in investing strategies, but professional risk management advice should help you discover some investing practices to reduce the risk of loss while simultaneously maximizing the possibility for you to achieve your financial goals.
The job of a professional financial adviser is to help you identify your objectives, pick an investment strategy that reflects them, build a suitable investment portfolio and help you stick to your overarching aims even during times of heightened market volatility. And if your goals change at any point during the process—whether two years or two decades down the line—your advisor should be on hand to help you adjust your portfolio strategy and help you invest as necessary.
Fortis Investments Belgium is dedicated to helping investors find the right balance for their investment portfolios. We believe education is key so investors can better define and achieve their financial goals with discipline and confidence.
Understanding Risk
Before you develop any kind of investment strategy, you must first define and understand your long-term financial goals. Questions you should consider are:
- What and who is this money going to be used for?To maintain your lifestyle, to improve your lifestyle, for travel, for new pursuits in your retirement, to help with expenses of your children or grandchildren? The answers are likely to affect your choice of growth strategy, choices of asset classes and attitude to market risk.
- What is your investment time horizon? Fortis Investments Management Belgium defines this as working out how long you will need your money to last. Remember, people are living longer than ever before and you may also have to consider the life expectancy of your spouse, dependents and whether you wish to leave a charitable legacy.
Once you’ve defined your long-term goals and investment time horizon, you can begin the process of developing a strategy. You might choose to invest directly in equities, or in index-tracking products like Exchange-Traded Funds (ETFs), which effectively represent a basket of securities in which you are part owner. But you still must answer questions. Which types of securities are best for your goals? Should you buy and hold or continually re-balance?
Fortis Investments Belgium can help qualified investors with at least £250,000 in investible assets define a plan and get on the path to their portfolio goals by recommending an asset allocation—mix of stocks, fixed interest, cash and other securities in your portfolio—tailored to their longer-term objectives. Our parent organisation, USA-based Fortis Investments, is responsible for the ongoing portfolio management services. Fortis Investments is a wealth and asset management firm which has been managing investment portfolios for individual investors since the mid-1990s.*
The 70-20-10 Top-Down Philosophy
Fortis Investments believes that a good investment strategy should help you focus on and achieve your ultimate income and retirement aims. Our 70-20-10 model and top-down approach to asset allocation is founded on the belief that 70% of your portfolio return can be attributed to asset allocation, 20% from market/sector/investing style, and 10% from specific shares and other securities selected.
- We believe that asset allocation accounts for around 70% of returns: For example, equities, fixed interest, cash or other securities.
- We believe that sub-asset allocation accounts for around 20% of returns: For example, asset allocation within stocks selected on the basis of specific factors such as country, sector, company size, or asset allocation within fixed interest selected on the basis of duration, issuer type, credit quality or whether taxable or tax-free.
- We believe that individual security selection accounts for around 10% of returns: For example, Fortis Investments performs extensive research and technical analysis to evaluate specific equities, fixed interest or other types of securities.
The 70-20-10 Top-Down Philosophy
Investors have a tendency towards the familiar, and although this is understandable, investing solely in what you know is often too restrictive; domestic markets make up only a tiny fraction of the world’s stocks and there is additional risk involved when placing all your eggs in one basket. It is important to remember, however, that the diversification of your portfolio, including stock selection and asset classes, should ultimately be tailored to reflect your individual situation and long-term goals.
A globally diversified portfolio can be an effective way to maximise your chances of attaining your objectives. Is this higher risk, you might ask? If you diversify and invest across a wide range of markets and sectors, your investment accounts will spread investment risk and this can help manage the threat of high loss without sacrificing potential capital growth.
Investor Education
The Fortis group is dedicated to investor education. Not only can this provide reassurance and peace of mind, it can also help you stay disciplined and on course even during times of uncertainty or volatility. This is because portfolio investing can be highly emotional, even triggering the classic fear response of “fight or flight”—particularly when your retirement and financial goals are at stake.
Fortunately, knowledge and education can help overcome this fear, which in turn helps prevent you from making any emotionally motivated deviations from your investment strategy.
As part of our commitment to investor education, Fortis Investment Management Belgium offers a variety of guides and insights on our website to help educate investors, so they can better approach investing and goal-setting.
Contact Fortis Investments Management Today
For more information, download one of our educational investing guides to learn more about our process or contact us for a consultation with one of our representatives.
Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.
