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Planning and Guidance

Getting started

Understand the Risk-Return Trade off.

Investing is one of the most effective ways to grow your wealth over time and achieve your financial goals. At the same time, you need to be aware that every investment carries its own level of risk and potential for return.

A higher level of investment risk usually means that you can expect greater growth and returns. But your chances of losing money on your investments are higher too.

At Ancoria, the first thing we’ll do is give you the tools you need to understand your investor profile. Creating your own investor profile will make it easier for you to assess your risk tolerance, i.e. how much risk you can afford.

Once your investment selection is in line with your investment goals, it’s all about giving time to your investment to grow. At this stage, it’s important to try and not to get distracted by the inevitable short-term market falls, and to focus on the long-term growth of your investment.

Asset classes

Equities, also known as stocks and shares, are your ownership stake in a company. When you invest in equities, you have a claim on the future profitability of a company and your return comes in the form of both dividend income distribution and capital appreciation.

Equity funds invest in a range of financially attractive companies on your behalf, minimizing your risk by spreading it out. Each fund has its own investment objective and strategy, which determine which companies it will invest in. Including more companies in your portfolio in order to reduce the risk of investing in a single company is also known as diversification.

While equities are sometimes more volatile in the short term, they’re usually the best choice for investors with a long-term investment horizon.

Bonds are securities that represent loans and debt obligations issued by companies or governments. Investors, the holders of the bonds, lend money in return for interest payments over a predetermined time period. If you invest in bonds, you’re looking for a fixed income paid regularly over a specific period of time, on top of your original investment.

Bond values are affected by interest rate levels, issuer credit quality and other factors like inflation and investor expectations.

Like equity funds, bond funds invest in a range of holdings on behalf of investors. These holdings are chosen according to the fund’s investment objective with the aim of spreading investment risk.

Alternative investments are essentially investments that don’t fall under traditional asset classes like equities, bonds or money market funds, and are usually used by fund managers as a diversification tool, since they typically react to the same event differently compared to traditional asset classes.

Alternative investments may include assets like real estate, commodities and hedge funds, and are typically only accessible to institutional investors.

Retail investors can gain access to alternative investments through alternative investment funds. Alternative investment funds invest in a wide range of instruments, according to their investment objective, and so spread risk.

Cash investments generally offer the lowest investment risk (and return) of all the asset classes. Investors who hold cash can use it to preserve their capital, meet short-term spending needs and cover emergency expenses.

If you have a short-term saving goal, you might consider investing in cash funds. If, on the other hand, you have a long-term horizon and you’ve invested in cash, inflation might reduce the real value of your investment, especially when interest rates are low.



An investment fund, or mutual fund, or simply a fund, pools money from a number of different investors and then invests this money across a number of investments depending on the fund’s investment objective and strategy. Funds can give you access to diversified, professionally managed portfolios at a low price. Fund managers will decide which assets will be bought and sold based on a fund’s investment objective.

An exchange-traded fund (ETF) is a type of investment fund. ETFs are traded on an exchange, like equities. Their investment objective is to track a specific index.

If you invest in funds, you:

  • benefit from your fund manager’s expertise, knowledge and experience
  • have access to globally diversified investment products that may not be available to individuals
  • minimize your investment risk by spreading it out over a variety of asset classes