Because no two investors are alike, Lexo offers a range of portfolios to choose from, each designed with an optimal asset allocation based on varying levels of risk. Your tolerance to risk and your investment goals – desired returns – determine the investment strategy you should follow.
Risk vs Reward
Risk and return are related to the extent that it is not possible to achieve a higher investment return without taking more investment risk. Many investors are guided by their “risk appetite” – that is, how much investment risk they are prepared to tolerate.
But taking too little investment risk is risky in itself – the danger being that your assets will not grow enough to meet your investment goals. A trade-off is necessary to achieve a balance between taking enough risk to achieve your goals, while not being reckless: the timeless ‘risk vs reward’ scenario.
Determining your appetite for risk
Some of the key factors to consider in deciding what kind of investor you are include:
Time Horizon and Liquidity Needs
How soon might you need to withdraw money from your investments? The longer an investor holds onto a risky asset, the lower the chance of obtaining poor cumulative returns is likely to be.
Attitude to Risk
What is your aversion or attraction to risk when risk is defined as “the possibility of loss”?
Net Worth
Generally speaking, the more assets an investor has in reserve, the higher their capacity for risk.
Income and Savings Rate
How much can you save? In the same way that greater wealth enables a greater appetite for risk, so too does being able to put more aside regularly.
Investment Knowledge
How good is your understanding of the investment you are making and how it behaves over time?
Your investment goals
What are you looking to achieve through your investment?
Accumulators
Whether you are saving for retirement, your family or just for the future, we are here to support you in your quest to grow your savings. Whether this is via a Pension, ISA or General Investment Account, we have the solutions to help your capital grow.
Distribution portfolios
If you’ve reached the time of your life where you now require an income taken from your pension and/or portfolio, you can draw down on your nest egg and enjoy better odds of long-term portfolio survival.
Trustees
If you hold the fiduciary responsibilities of a Trust fund, then Lexo is the ideal solution to manage the assets and maximise your gains.
Each investor has their own financial situations, investment time horizon, funding strategy, investment experience, tax status, risk tolerances, goals, and other life circumstances going on. Once you’ve considered yours, research our four online wealth management strategies that will guide you to the right portfolio – for you.
Lexo is a trading name of Lexington Wealth Management Ltd, which is authorised and regulated by the Financial Conduct Authority under reference number 440099.