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What is an investment plan?

Your investment plan should outline what you’re planning to use the money for, how long you’re willing to leave it invested and what vehicles you put your money into to achieve your goals.

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An investment plan is your strategy that encompasses your current financial position and your investment goals. Your investment plan should outline what you’re planning to use the money for, how long you’re willing to leave it invested and what vehicles you put your money into to achieve your goals.

If you have a long term goal for example retirement and you are not averse to a relatively higher level of risk you may seek to have a larger weighting in more volatile holdings which could potentially reap higher yields. If your concern is losing money in market dips, you might want to spread your money out further into different sectors, markets or geographies to better ride out the wave.

It can be useful to look at historical returns from investments to project what your returns might look like in the future but remember that past performance is not indicative of future results. Whatever your goals are you should always bear in mind what your current and future financial outlook looks like.

For example whether you’re likely to have a growing or shrinking income, how much of your original investment are you prepared to lose to achieve a higher return on your investment, and what potential fees apply to your holdings selection and how that affects your earnings potential.

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