Web Financial Marketing

Archive for April, 2009

Probably everyone can identify with the old proverb “don’t put all your eggs in one basket”. We all know is makes sense not to encourage such risk. The same thoughts can be applied to our investment portfolios – no one likes to think they will lose money. We are told to diversify our risk, but is investor diversification the best plan for everyone?

Depending where you are in your investment life your acceptance of risk, known as your risk profile, will change. As a young parent your risk level may be low – it is hard enough to save the money, you can’t afford to lose it. As your move into your main earnings years you are a little more risk attuned. You have the ability to weather any particular losses and time to make up those losses. When you have reached retirement and are living off those investments your risk profile may be low again. In all those stages the level of portfolio diversification is likely to be different.

Diversification, by its very nature, means that while our risks are minimized our exposure to profits can also be minimized. The money we have tied up in fixed interest is not available to take advantage of a red hot stock picks or a booming property market.

There are many home insurance products available, and it is important to consider your needs before just going for the cheapest possible deal.

Almost all mortgage providers will insist that you have buildings insurance to cover the cost of rebuilding your home in case of disaster. This is so that they are able to recover the asset which is your home if for some reason you cannot pay the mortgage.

Your buildings insurance should ideally cover the cost of alternative accommodation if for some reason your home is made uninhabitable. You should also be very careful to double check that the policy fully covers the cost of rebuilding rather than just giving you the market value of your property.

Contents and Buildings insurance will both normally cover you for damage or destruction of your property by flood, storms, fire, theft and vandalism, but higher levels of cover are available if you feel that it is necessary, for example accidental damage. If you have children in the home this can be very useful and well worth the extra premium.