Diversification is the practice of spreading your investments – and thereby your risks – across several different types of investments, such as stocks, bonds, and cash. While diversification doesn’t protect against loss in a declining market, it can help limit the size of any losses. If one type of investment performs poorly, other areas of your portfolio may help offset your losses if the sector of the market they’re invested in is less affected or performs positively.

An asset is something you invest in, like property, shares, bonds or putting cash in the bank. Therefore, a group of ‘property’ investments form an asset class as do a group of ‘shares’ and so on. Assets usually fall into two main categories; defensive and growth. Defensive assets are typically less risky and more stable over the short term but tend to produce lower returns over the long term. Cash and Fixed Interest are examples of defensive assets. Growth assets are typically higher risk and more volatile in the short term but tend to produce higher returns over the long term. Shares and property are examples of growth assets.

A trust is a fiduciary arrangement that allows a 3rd party (trustee) to hold assets on behalf of a beneficiary.  If you wish to appoint a specific beneficiary who will receive or inherit the assets in your account upon your demise you are advised to set up a trust.  Most of our product partners provide this facility.