Investment strategy for retirement

Posted in Communication   |   March 17th, 2020

Life is a series of unpredictable events where situations and circumstances seldom remain the same. The continuous volatility of financial markets and changing legislation are factors which highlight the importance of a financial strategy when making financial planning decisions that are based on informed advice and trustworthy information from reliable professionals.

You’re Retirement Investment Objectives

Your objective should be to find the right Investment Portfolio mix to meet your income and capital growth needs. In defining the needs, special consideration should be given to the following;

• The eroding effect of escalating living expenses
• Funding of escalating expenses other than living expenses, eg. Security, health funding, replacement of vehicle and general property expenses
• Capital losses through bad investment decisions

Once you have a clear picture of the what you want to achieve and what your investment objectives are, you need to understand the risk of the investment, the volatility of the investment and the possible outcome the portfolio will offer you over time.

Choosing the right combination of investments and products needed to meet the following additional criteria;

• Sustainable income withdrawal
• Balance between capital growth and capital preservation
• Balance between short-, medium and long term growth objectives
• Balance between passive and active investing
• Consideration must be given to structuring a cost effective portfolio that will consistently outperform inflation

Utilization of the: “Expected Investment Return Strategy” to achieve Investment Objectives

Over the last 20 years, as a result of client feedback, research, experience and successful outcomes, here at SOFS, we have developed the Expected Investment Return Strategy. See table below.

Asset allocation is responsible for 95% of investment return and not necessarily investment timing. Once the outcome of the client’s risk profile, needs analysis, financial goals and investment objectives have been determined, the asset allocation matrix can assist the investor to choose the investment combination of portfolio’s to match the time-horizons planned for. The investor can benefit from economic cycle changes by matching the right asset allocation to the right time horizon. We believe our Expected Investment Return Strategy, is the core, from which wise investment portfolios selections can be made.

By utilizing the asset allocation matrix we believe all the investment objectives previously highlighted can be met.