Lesson 48
Planning a share portfolio
How does the older investor differ in his approach to investment from the younger investor?
There is no shortage of tipsters around offering 'get-rich-quick' opportunities.
But if you are a serious private investor, leave the Las Vegas mentality to those with money to fritter.
The serious investor needs a proper 'portfolio' --a well-planned selection of investments, with a definite structure and a clear aim.
But exactly how does a newcomer to the stock market go about achieving that?
Well, if you go to five reputable stock brokers and ask them what you should do with your money,
you're likely to get five different answers,
-- even if you give all the relevant information about your age, family, finances and what you want from your investments.
Moral? There is no one 'right' way to structure a portfolio.
However, there are undoubtedly some wrong ways, and you can be sure that none of our five advisers
would have suggested sinking all (or perhaps any) of your money into Periwigs.
So what should you do?
We'll assume that you have sorted out the basics--like mortgages, pensions, insurance and access to sufficient cash reserves.
You should then establish your own individual aims.
These are partly a matter of personal circumstances, partly a matter of psychology.
For instance, if you are older you have less time to recover from any major losses, and you may well wish to boost your pension income.
So preserving your capital and generating extra income are your main priorities.
In this case, you'd probably construct a portfolio with some shares (but not high risk ones), along with gilts, cash deposits,