Putting your own investment strategy on track

Every investor is different: some adopt a high-risk approach in the aim of generating the greatest possible return on the stock exchange. Others pursue safety-first strategies. They invest in assets that entail less risk, but which also generate lower returns. Many people prefer to adopt a balanced investment approach  – risk-aware, but return-optimized. Fortunately, today private investors can determine an investment strategy tailored to their requirements inexpensively and select the desired weighting between shares, bonds and other forms of financial investment. More on this can be found in the article entitled “In simple terms, what’s an investor profile?” Investment strategy funds directly aligned with the investor’s strategy make investment even easier.  

When offloading assets is the best option

A significant change to your own financial situation can have an impact on your personal investment strategy and the investment horizon aimed at. It’s therefore advisable to review your own portfolio from time to time and to redeploy assets if necessary. This means selling existing investments and purchasing more suitable products. For example, an investment strategy with a very high weighting of shares may be suitable for a single person who is financially independent. After buying a home and starting a family, people’s risk appetite may decline and their investment strategy may need to be revised. Reducing the amount of shares may be a good solution, for example.

But not every deviation needs to be immediately offset – restructuring a portfolio entails both direct costs (for example, fees) as well as indirect ones incurred through the purchase of new products – any currency differences must also be taken into account.

Long-term planning pays off

Investors should plan long-term as far as possible. They should also regularly review their personal investment strategy as their investment horizon, risk appetite and risk capacity can change over the course of time due to new circumstances in life.

Your advisor would be pleased to assist you in defining your individual investment strategy and with planning the sale of your assets.

If you’re going to sell investments, it’s best to think everything through carefully – it’s worth keeping a close eye on fees, for example. Costs are incurred when selling shares, bonds and sometimes also funds. This varies from bank to bank.

In the case of funds, there is an alternative solution to selling all the fund units in one go: by setting up a fund withdrawal plan  A fund withdrawal plan allows you to take out the assets invested in a fund on a staggered basis. This means that not all fund units are sold at the same time but instead according to a schedule defined by you (withdrawal amount, frequency). This approach helps even out price fluctuations., investors who have accumulated assets can have amounts paid out on a regular basis. They can decide on the amount and frequency of payments for themselves.

The idea behind this is that not all of the fund units are sold and paid out at the same time, but instead based on a plan determined by the investor governing the level and regularity of payments. This approach should offset any price fluctuations. It also allows investors to minimize the risk of selling at an unfavourable time.

Investors holding securities, such as shares or ETFs, have the option of placing various types of order, such as stop orders, via an online trading platform or a customer advisor. A stop price (stop loss limit) below the current share listing is determined in the sales order where the transaction is triggered when the price set is reached. This enables investors to restrict losses or to realize profits already made. More about this can be found in the article entitled “What types of order are there?”