It’s sometimes difficult to separate money you’ve inherited from your memories of the person who left it to you, but the money is now yours so I suggest you concentrate on what is right for you and your personal circumstances when making investment decisions.
Certainly, the first half of your working life is a time when you can perhaps afford to take a little more risk with your long-term investments, depending on your circumstances and financial objectives. It may be that you need to take a higher level of risk at this stage in order to achieve those objectives. However, the level of risk that you take should be comfortable for you and not unduly compromise your day-to-day financial security. The important thing is that you understand investment risk and evaluate how you feel about it.
In most cases, an investment portfolio should hold a diverse range of investments to spread your exposure to investment risk – and hopefully provide steadier returns – but the overall risk level of the portfolio will depend on you, your attitude to investment risk and your financial needs.
I suggest you talk to a Chartered Financial Planner who can give you independent advice about a suitable portfolio. The Planner will help you establish your risk profile and explain how you can take different levels of risk at different times in your life. An investment portfolio for someone in their thirties will normally be quite different to that of someone in their sixties, for example.
It is generally the case that investing at a younger age means that a portfolio may have the opportunity to recover from any setbacks along the way. However, this will depend on the degree of risk, the type of investment, the time period and other factors. It is also important to recognise at what points in your life you might wish to access your investments – to buy a new home or send children to university, for example – and build this into your planning as these could affect the risk you are prepared to take with certain elements of the money.
Any opinions expressed in this article do not constitute advice. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.