Investment planning is about deciding what to invest in in each of your accounts.
Different investment sectors such as equities (shares) and bonds provide different investment return characteristics and can perform differently in different investment conditions.
Deciding how to allocate your funds to each different sectors is called ‘asset allocation’.
Short dated bonds: provide liquidity and stabilise the portfolios overall value
High yield bonds: higher yielding hybrid capital securities issued by blue chip companies; generate income and predictable returns, generally with less volatility than equities.
Alternatives: alternative ways to generate income, such as property infrastructure or actively managed mixed asset funds, ideally uncorrelated to equities
Equity income: to generate long term increasing income from the shares of companies paying higher dividends; comes with volatility
Equity growth: to generate long term capital gains from shares in faster growing companies; comes with volatility
Having decided which sectors you want to invest in, you then need to look at how you will invest and this will be different in different sectors.
Overall investment planning needs to address:
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