If you decide to pick your own investments, there are a few things you should think about.Spreading your investments Most experts agree success is down to the mix of things you invest in, like property, cash and equities. If one suffers, you might not be so badly hit because your eggs aren’t all in one basket. An adviser can help you pick a mix of investments that’s right for you.

Picking funds that match how you feel about risk
The more risk you’re ready to take, the bigger returns you could get – and the more you could lose. Lower-risk investments give you more security but lower returns. Sadly, there’s no such thing as a low-risk route to high returns. You’ll need to decide how much risk you want to take with your pension savings. And watch your portfolio to make sure it doesn’t open you up to more risk (or less) as time goes on.

Watching your investments
If you’re in charge, you’ll need to keep a close eye on your investments to check they’re doing what you need them to do.If markets dip, you can limit the damage to your savings. And if you spot potential, you can take advantage.But don’t overdo it. Investing is a marathon, not a sprint.For detailed information and to work out your personal requirements you should please speak to one of our financial adviser.

Making Sense of Risk

Understanding all the risks involved when selecting an investment fund can be a daunting and confusing experience for most people.

Exchange rate
This fund invests in investments outside the UK. This means that the value of these investments will decrease or increase as a result of changes in exchange rates between currencies.

Emerging markets
This fund invests predominantly in Emerging markets. Emerging markets can offer attractive investment opportunities, but they are generally less well regulated than the UK and it can sometimes be difficult to buy and sell investments in these areas. There is also a greater chance of  political and economic instability and so these funds carry higher risks than those investing in larger, more established markets.

Concentrated portfolio
This fund invests in a relatively small number of holdings – usually less than 25. This means that changes in the value of each investment
can have a significant effect on the value of the fund. Funds with concentrated portfolios can produce higher returns than funds which are
more diversified, but they also carry more risk as there is less diversification.

Smaller companies
This fund invests in smaller companies, which can experience bigger price movements than larger companies and can sometimes be more
difficult to buy and sell. Funds which invest in smaller companies can produce higher returns than funds which are more diversified, but they
also carry more risk.

High yield bonds
This fund invests in high yield bonds which can experience bigger price movements than investment grade bonds. High yield bonds pay a higher level of interest than some other bonds which can result in higher returns, but it is also more likely that the issuer of the bond will fail
to re-pay the loan which would affect the value of investments in the fund.

Sector specific
This fund invests in specific market sectors, such as technology or pharmaceuticals. The value of the fund will be closely linked to the performance of the specific sectors it invests in. Sector funds can produce higher returns than funds which are diversified across a number of
different sectors, but they also carry more risk.

Geared investments
Funds which focus on geared investments such as warrants or options carry higher risks because the risk of the underlying investments could be very high. Geared investments can produce high returns, but losses could even equal the amount invested, in which case you would get nothing back.

Property
This fund invests in property. Property can reduce the risk profile of a portfolio as it can behave differently to other asset classes, but the value of the properties held in the fund is based on the subjective opinions of independent agents. Buying and selling property is usually more expensive and more difficult than trading other types of assets. This means that, in exceptional circumstances, withdrawals from property funds may delayed.

Higher risk funds
This fund concentrates in an investment area that may be exposed to unusual political or economic risks. You should only invest if you are comfortable with the specific risks pertaining to this fund.

Derivatives
This fund invests in derivatives as part of its investment strategy. Investing in derivatives can, under certain circumstances, result in bigger
movements in price which produce higher levels of growth or greater losses. There is also the risk that the company issuing the derivative may not honour their obligations which could result in losses and affect the value of investments in the fund.

Equities
This fund invests in equities. Equities are shares in companies and can experience bigger movements in price than other types of investment. Funds which invest in equities can produce higher returns than other funds but they also carry more risk.

Bonds
This fund invests in bonds. Bonds are loans to governments and companies and their value can go up and down. If the issuer of a bond held
within the fund fails to repay the loan this would affect the value of investments in the fund.

Money market
This fund invests in money market instruments. These are typically lower risk investments, but their value is not guaranteed and may fall. Money market instruments would usually be expected to produce lower returns than other asset classes over the long-term.

Stock lending
The fund may lend the stocks and shares it holds to other funds in return for a fee. This can help fund performance as at least part of this fee will be added to the value of the fund. There are also risks to the fund from lending stock. One is borrower risk as the borrower may not repay the loan – for example if they become insolvent. Another is collateral risk – lenders often request that the borrower commits a specific asset to cover the loan. If the borrower was unable to re-pay the loan, ownership of this asset would transfer to the lender. This reduces the risk
of stock lending, but there is still the risk that the value of the asset isn’t enough to replace the stocks and shares which have been borrowed. Any losses due to stock lending could affect the value of investments in the fund.