Unit trust funds may just be the type of investment for you

MANY have looked far and wide for Ms Right (Investment), the one with the sexy, super model looks and outgoing personality (attractive, high double-digit growth and guaranteed returns).

The good news is that Ms Right might actually have been with us all this time, amongst close friends (unit trust funds). Ms Right, however, might not necessarily have the glitzy characteristics; instead we have the humble, charming and loving personality (well diversified, proven track record and consistent returns).

Interested to know how to find Ms Right? Or are we avoiding a relationship with Ms Right because we won’t risk broken hearts (suffering losses)? For the relationship to work, there are some basic ground rules:

1) Know the purpose of your investment. Are you investing because everyone is making good returns and you feel left out? In this case, you might be investing on the wrong basis.

2) Then, establish a timeframe for your investments. Do you need the money in the short to medium term? If yes, then investing might not be for you.

Investment returns can be volatile over shorter periods. However, for the longer term, say four to six years, the returns from investments might very pleasantly surprise you.

3) Next, a proven strategy is essential. For example, dollar cost averaging, putting in regular investments, setting profit and loss target levels. At which point perhaps do we need to realign our portfolio? What about creating a suitable portfolio that caters for the amount of risk you can handle and looking out for opportunities during crisis periods?

4) Lastly, are your investments reviewed pperiodically That does not mean daily, weekly or even monthly reviews. A six-monthly review can ensure our investments stay the course and are aligned to our goals.

A successful relationship with Ms Right needs nurturing, commitment, and constant input and feedback.

The writer can be contacted at [e-mail]