RISKY BUSINESS WHY LOOKING AT YOUR OWN PERSONAL ATTITUDE TO RISK COULD HELP YOU CHOOSE THE MOST SUITABLE INVESTMENTS. ‘investment s entrly fre from, risk, and the size ofthe potential reward is usually determined ‘byhow much riskan investor ‘wants 0 take, So have you thought about how much risk you ‘might want to shoulder with your eurentand future investments? By asking some basic questions about ourselves, our wealth and the ype of lfestyle we want we can draw a picture of our riskprofile For example, ageisan important factor. If retirements just around the corner, you might belooking ora stable but probably fixed income and no nasty surprises, which s likely © mean yout have a low-risk, conservative profile. ASSESSING YOUR ATTTUDE TO RISK ‘Conversely, a young, well-paid person with low outgoings, no dependants, plenty of future ‘earning potential and cash inthe bankeould decide to look forhigherretums, but with a ‘yeater chance oflosing money as thisisless Hkely tobe a serious concern, This person is 26 Liquid spans 10 “DIVERSIFYING A PORTFOLIO, RATHER THAN PLACING ALL YOUR EGGS IN ONE BASKET, WILL CERTAINLY SPREAD YOUR OVERALL INVESTMENT RISK.” more likely have an aggressive or high-risk investor profile Inbetween these two profiles are many degrees ofrsk taking, and how we invest with i In mind takes many forms. Low-tisk investments Include government bonds, for example through [National Savings and Investments products, whi high-risk investments could include emerging ‘markets, sch as BRICnations (see page 19), or speculative or aggresive funds. [MAKING THE RIGHT CHOICE ‘Choosing which assets to investin and at what time are crucial rsk-profiing decisions, and taking advice should be seen asakey partofthe decision-making process. Hore, the fire top is ikely to be a care assessment of what your sk profile looks like, based on your investmentneeds and timeframes Having created a profile its time tolook for the investment opportunites that match this, Financial advisers ean then expiain to customers bout the range of investments availableto them, providing more detail around astet classes such as equites, funds, bonds and perhaps ‘wider portfolios containing some or all ofthese investments. Diversifyinga portfolio, rather than placing all your eggs in one basket, wll certainly spread your overall investment risk, while the construction ofeach individual portfolio ean ‘be weighted wih reference 1o more cautious oF ‘aggresive personal risk profiles. “The result should be the right balance of ‘sk and reward that provides suitable return, ‘without keeping you awake at night. APORTFOLIO FOR EVERY RISK PROFILE Diversification and spreading risk are wo reasons why HSBC's lients choose to invest in Weed Selection Portoles. These are designed to match investors’ risk appetites and achiove the best performance fora given level africk acrass a diverse range of global markets. Careful asset allocation isthe key. Simone Paravani, Global Investment Strategist and HSBC Global Asset ‘Management’ leader for the Worl Selection Portfolios, says: "Rigorous research toll us that our clients wore looking for more of ‘a smooth ride fortheir investments after the turmoil that they had experienced previously. we see aur job as worrying about ‘our clients investments so that aur clients sdon'thave to" Pose note, vesting shoul bo sen as mediums tolengm propstion (a five years or mae) Pest performance connot be used asa gi te ftre exformance andthe vais fowostments con go down walla up You may not get back eu mount of {gourarginlimestment lense note, evn with amid partfala, the veiue of vestmentca fell os woe, dnd exchange ates can reduce as we.osinreose the ‘value ofoversoasinvctmont whon thoy ae contrtod from ore curerey to onater