Page 26 - Waterfall_Issue 6_2022
P. 26
Waterfall News
HOW SECURITIES
CAN HELP YOU
REALISE YOUR
FINANCIAL GOALS
By Wendy Myers, Head of Securities at PSG Wealth
Use shares to boost your investment plan
There are a myriad of investment options available to
you as an investor. However, in this article, I’m going to
focus on how shares can boost your investment plan.
When considering investing in shares, it is important
to determine whether you are a growth or value
investor. Your risk appetite and time horizon will
influence this decision. The question of whether
a growth or a value stock investment strategy is
better for you should be evaluated in the context
of your time horizon and the amount of volatility
(and thus risk) you are prepared to endure.
The difference between value and growth
investors:
• MP Cussen from Investopedia states that growth
investors tend to seek out stocks with high capital
growth potential, and they value this growth
more than dividend income. These stocks tend
to come with increased price volatility.
• Value investors seek out stocks considered
to have a lower level of risk and volatility
associated with them because they are usually
larger, more established companies. They offer Using the services of a qualified financial adviser
capital growth and often pay dividends. takes the stress of trading off your shoulders, and
comes with a number of additional benefits. Your
A. How trading can help build your legacy financial adviser will not only match your risk profile
Once you have determined whether you are a growth to the most appropriate basket of stocks, but will also
or a value investor, you need to consider whether you recommend the type of vehicle to be used to facilitate
want to trade in your own capacity or make use of such investment. Annual reviews of your portfolio’s
the services of a financial adviser. Trading in your own performance provides you with a means to assess your
capacity ensures you can define the stock entry level. progress towards your financial goals on a yearly basis.
If you feel a particular share has reached its growth
potential, you can capitalise on selling out of your B. Factors to consider when selecting an
position. Stock markets are emotive, and shares move appropriate vehicle – different benefits
based on the performance of the underlying company as depend on individual needs
well as macroeconomic factors. Active trading in stocks New investors frequently don’t understand the
allows you to capitalise on these share price movements. difference between asset classes and investment
In this way, you can actively build your legacy. vehicles that are available. These are laid out in Table 1.
24 Waterfall Issue 6 2022
