Page 31 - Waterfall City Issue 10 October 2024

INVESTING

EARLY IS BEST

But know the basics first

By Haydn Johns, Head of PSG Life and PSG Invest, PSG Wealth
L ike young investors, those setting

out on their investment journey
naturally have many questions,
and not finding suitable answers
can be a barrier to investing and
building a good foundation for a solid
financial future. There is a plethora of
quotes about starting to invest as early
as possible but while this is certainly
a crucial factor, doing so requires first
having an understanding of which asset
classes and product types to invest in.

Choosing asset classes suited
to your needs
A quote by Robert G Allen sums up why
investing in the correct asset class is
important: “How many millionaires do
you know who have become wealthy by case, this mismatch may cause you to
investing in savings accounts? I rest my make decisions that could negatively
case.”
impact your financial goals – such as
wanting to withdraw or switch out of
When considering what asset classes certain asset classes during periods of
to invest in, you must consider the market volatility.
outcomes you require your financial
plans to deliver and the time horizon Ensuring you select the correct asset
within which those outcomes should classes in the correct proportions is a
be achieved. For example, choosing a delicate balance and critical to achieving
low-risk asset class may result in your your desired financial outcomes. A
financial goals not being achieved skilled financial adviser can help you
because the returns typically associated navigate these considerations optimally
with these assets will not be high to help you reach your financial goals.
enough over time.
Selecting suitable products
Another critical factor when considering While certain products provide benefits
asset classes is your appetite for risk. that can offer tax relief, they may not
While being in an investment portfolio necessarily provide a younger investor
allocated to equities has historically Haydn Johns, Head of PSG Life and PSG Invest
given investors the best returns over the
long-term, investing in this asset class “Making sure that you select the correct asset
has also historically come with a lot of classes in the correct proportions is a delicate
volatility, which you might not be able
to stomach. Suppose your risk appetite balance, and one that is important to get right
is lower than the risk typically associated to achieve your desired financial outcomes.”
with the asset class you invest in. In that

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