An emergency fund is always necessary, especially for those based internationally. The money should be instantly available for the unforeseen events in life such as for a flight home, car maintenance or property repairs. Saving for the unexpected is vital and it is surprising how many of us do not have an emergency fund.
Saving on a regular or monthly basis is a great way to take advantage of dollar cost averaging and compound interest in order to achieve your goals.
Lump Sum Collective Investments
A ‘collective’ investment is a medium to long-term investment by which you are offered access to a range of funds from many different areas, such as shares, property, equities and government/corporate bonds. Your cash will be added to other investors’ cash and ‘pooled’ or ‘collected’ so that a fund is created. The fund can be designed for income, capital growth or a mix of both and is usually regulated by independent auditors.
A fund manager and his team brought in to ‘manage’ the fund would have access to information on market movements often not be available to individual investors. He or she would then buy and sell individual proponents of the fund on an almost daily basis and use their expertise to try and achieve specific targets.
Investment bonds are provided by Life Insurance companies and are sometimes referred to as ‘wrappers’, much like an empty bucket that you fill with the various collectives that you want to hold in one place. This type of bond has several advantages:
- All administration of the funds is collated in one place
- The life company has a certain buying power in order to purchase funds at greatly reduced costs
- The mitigation of some taxes – for example, Capital Gains Tax when you transfer between collectives or indeed Inheritance Tax.
Portfolio Management is a service for the investor who is perhaps unsure of the specific funds they should invest in and wants to take a less active role on choosing the ‘collectives’ for a portfolio.
ÆON advises on the construction of one or more portfolios, usually with varying degrees of ‘risk’ and assembles various collective investments of different quantities to give the right blend of funds. Each portfolio would include a targeted return dependent on the level of risk taken.