Time to look at your investments

18 February 2022
3 min read

Richard Lishman considers how best to manage a portfolio.

Many professionals will have an investment portfolio. A cleverly considered set of investments can help you achieve a number of financial goals, especially if you are nearing any landmark events in your life. This can include generating the capital needed to buy a new practice and expand your business, or even to make a nest egg ready for retirement – basically, good investments give you a level of financial security that really can make all the difference.

Investments by nature, however, are not guaranteed sources of income and can be a tricky area to navigate. Even once you have committed to certain investments it’s a good idea to assess these regularly. Here are some things to consider:

Are your current investments in line with your risk profile?
All investments are a gamble, and a general rule that applies is to remember that the higher you play, the more you have to gain – and lose! Your risk profile is effectively a measure of your willingness to take risks in the investment process. This profile is a useful tool for anyone working with you to determine proper investment asset allocation for your portfolio, as it lays the guidelines for which investments will suit your goals and means that they can identify stocks, bonds, and other investments that have a similar level of risk to what you are willing to accept.

A smart investor will always consider their circumstances and use these as a foundation to form their risk profile. It may seem tempting to go for high risk, high yield investments, but it’s essential to ensure that you have a back-up plan in place so that, should these investments fail and you end up losing money, this won’t have long- reaching consequences on your business or personal finances.

However, as you progress in your career and make more money, or if you have had any changes to your income flow, it is a good idea to see if your investments still align with your risk profile and whether you could make smarter investments to meet any goals in place.

For example, let’s say that you have recently received a significant lump sum and want to make the most of this good fortune. Now that you have a safety net of increased funds, you could review your investment portfolio and explore the possibility of investing in more high-risk speculations that could potentially lead to a bigger yield.

Conversely, if you are currently being more cautious with your finances, you can also adjust your portfolio to be more conservative. By taking fewer risks you are more likely to receive a stable level of income from your investments, which, although smaller in size, is a more reliable safety net.

Ethics and investments
Your investment portfolio is likely to be comprised of a wide variety of speculations that span across a number of industries. As such, it’s a good idea to see whether your portfolio reflects your ethical values, especially if you have any strong beliefs that may contrast with the areas you’re investing in or have any areas that you passionately believe in and want to support.

For example, if you want to do your bit in tackling climate change or have strong convictions about renewable energy, you can tailor your portfolio to reflect this and use your finances to help bolster these industries.

Another example could be that you’re against animal testing for certain products and want to avoid supporting businesses that still do this – it’s all about taking a closer look at your investments and seeing if there are alternatives with similar yields that align with your morals.

Expert advice makes the process simple
In all financial matters it pays to have experts, such as those at money4dentists, at your disposal who can guide you in the right direction and adjust your portfolio to meet your current needs. They can use their experience and industry knowledge to help you to adjust your portfolio so that it reflects your circumstances and aligns with your values.

Invest wisely and with conscience
At the end of the day, having an investment portfolio that suitably reflects the risks you’re willing to take and that aligns with your morals puts you in a very strong position. While investing is always a gamble, receiving expert advice and tailoring your portfolio carefully will mean that you can feel confident that your investments are not only going to continue to add a financial safety net, but also support companies that share your ethical outlook.