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Dangers you may face on your journey
   
     
Most investors understand that investing is not without risk and that they may even lose part or all of their investment. There are many strategies that can be taken to reduce risk. However, investors should be aware that reducing risk may also reduce the potential for return.

Many clients will want to take risk as they see the benefit of long term investing in ownership based investments. Some may take the view of "nothing ventured, nothing gained" and so will often take more risk than they should. For instance, hearsay will influence an investor's choice, which may not be right for them in reality.

There may be the desire to be adventurous; however, the funds available and objectives to be achieved may reduce the scope to take risks. It would be unfortunate to see any easily met objective fail due to losses caused by an overly aggressive investment strategy.

Currency Risk
Changes in exchange rates can have a significant impact on the value of international holdings and can be unpredictable: we believe this can be minimised by diversifying a certain amount of investments with different international markets.

  Risks that you should be aware of include:

Inflation Risk
Prices tend to rise every year and if inflation was 4%, what you buy today will cost twice as much in 18 years-time: we believe investing in a certain amount of growth focussed equities may help you keep pace with inflation.

Interest Rate Risk
Changes in interest rates can have an impact on the income from fixed interest investments, especially when holding short-term bonds. Also longer term bond's capital values are more likely to fluctuate: we believe by staggering maturities of the bonds held, you will iron out any wide swings in your overall principal and income.

Credit Risk
Is the risk of loss of principal or the expected income stream due to the borrower's failure to repay the whole or part of the capital sum or interest payments. The higher the perceived credit risk, the higher the rate of interest the investors will demand: we believe that we can mitigate credit risk by a strict adherence to investing in companies where the rating agencies consider them to be more creditworthy.

 
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Exeter Offices | Tel: 01404 598 373
Briar House, Clyst Honiton, Exeter, Devon, EX5 2LZ
Cheltenham Offices | Tel: 01242 807 455
6 Bath Mews, Bath Parade, Cheltenham, GL53 7HL
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The Mews, Queens Street, Colyton, Devon, EX24 6JU
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32 Rolle Street, Exmouth, Devon EX8 2SH
 
 
 

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