IT AIN’T EASY
According to popular estimates, around 90% of “self- investors” lose money – NINETY PERCENT!
But if it’s so hard to reach a profit from your investments, why do people still invest? Well, one big reason is that you CAN make a lot of money in the stock markets, even if the numbers seem stacked against you – and because we can see the results for the few who managed to win big.
Another reason is that in many countries now, banks offer such a small interest rate for their savings accounts that the stock market is one of the most trusted places for people looking to earn from their savings.
Not everyone is willing to take an adventurous investment strategy to HOPEFULLY see some higher returns, but here is the great news… professionals will manage your money for you whether you are adventurous or simply someone hoping for a slightly better return than the bank can offer!
At NEBA, we offer tailor made model portfolios for clients who wish to truly leave their investments to the professionals. Let’s take a look at how our model portfolios work:
Model Portfolio Diversification
You’ve no doubt heard the phrase “Don’t put all your eggs in one basket,” and the logic here is simple. If you have your eggs in two baskets, and you drop one basket, you still have some eggs left unbroken. If all your eggs were in the basket that fell, there is a chance none of them would be usable. With investing, the same rule applies. The more assets you have as part of your portfolio, the more likely you are to limit your losses in turbulent times, which seem to be fairly frequent at the moment.
Within a NEBA model portfolio, you will not only have your eggs in two baskets, you’ll have your eggs in four, five or even more baskets, with each basket usually consisting of between 100 and 500 smaller baskets. Simply put, we’ll invest your money into multiple different funds, with each fund investing into lots of different assets, meaning two levels of diversification.
The graph below shows that some investment assets go up in value, whilst others go down giving balance:
Model Portfolio by Investment Appetite
You may or not be adventurous – after all, you may be looking to simply protect your money while keeping it away from your savings account where you tend to spend it pretty quickly, or you may be trying to desperately save for your child’s education but have no idea how you’ll save enough in time. You might be trying to grow your wealth as quickly as possible so you can make it onto the world’s list of millionaires.
Whatever investment appetite you are comfortable with, there is a NEBA Model Portfolio that will suit you. That being said: although you may be a cautious investor, you may still be exposed to some more adventurous assets. However, you will only be exposed by a small percentage of the capital into such assets. Similarly, even those with an adventurous appetite will be exposed partly into less risky assets. The difference comes with the percentage of the capital allocated to each fund. It may look like this:
Example of Fund Diversification
Fund 1: 20%
Fund 2: 20%
Fund 3: 10%
Fund 4: 30%
Other Assets: 20%
OR
Fund 1: 25%
Fund 2: 10%
Fund 3: 15%
Fund 4: 10%
Other Assets: 40%
However your individual portfolio may look, it will be matched to the attitude to investing you are comfortable with. Each professional fund manager will be aiming for different levels of return, and our portfolios will consider the average expected return to help you reach your goals over your investment horizon.
DIVERSIFY, DIVERSIFY, DIFERSIFY
Understanding your Model Portfolio
At NEBA, we believe in being honest and transparent regarding your investments. Before we invest your hard- earned money into any portfolio, we will make sure you understand the fees and charges involved, as well as the targeted returns over a period of time. Your NEBA advisor will make the whole process simple starting with an attitude to investing assessment.
Model portfolios are a great way to keep things simple, appetite-appropriate, and professionally managed, whilst also maintaining control of your own money. If you are interested in investing into a NEBA model portfolio, or if you would like to speak to one of our advisors to discuss your questions, you can find our contact information on our website: www.nebawealth.com.
