Planning one's future depends on what goals are set and over what time frames they are meant to be achieved. Investing at an early stage is the key to meet any future long-term goals. Best results are achieved when investors contribute on a regular basis. Most of us wish to be able to save more. The question is how to go about this, particularly getting started.
The key to saving is to spend what you have left after investing, rather than invest what you have left after spending.
The Monthly Investment Plan (“MIP”) provides you with an excellent way to start planning for your future. By allocating a small amount of your salary every month, you can easily start an MIP. Whether you are a post-graduate about to embark on your career and looking for a way to start investing, or you have been earning a regular salary for a while and wish to discipline yourself to develop a savings habit, a MIP fits your objective.
By choosing to invest a sum of money every month in an investment fund of your choice, you will minimise the downside to the markets over the years by purchasing units at different prices. This strategy of price averaging does not try to time markets. Instead it reduces the risk of investing a large amount, at an unfavourable time, by spreading your investments over a period of months, years or even decades. BOV Asset Management with approximately €847 million in funds under management as at the end of December 2016, provides you with the flexibility to increase or decrease to a minimum of €50 (or US$50 or £30), suspend or cancel your monthly contribution as your financial circumstances may necessitate from time to time.
Investing through a MIP also offers an element of flexibility since most investment funds are not closed-ended and have no maturity date, trade daily and are accessible within a short time frame. You can also keep your plan for as long as you wish. Whilst you should aim to save for the long-term, you can withdraw money within a short period of time.
There are various investment funds which one can access through an MIP, ranging from those with the objective of generating income to those that seek to grow the capital. The range of investment funds managed by BOV Asset Management invest in the domestic and international markets across the main asset classes. These funds are available in all the major currencies and have different risk profiles to meet the investment requirements of different types of investors.
Market timing is one of the biggest dilemmas investors face. This refers to the strategy that attempts to predict future market movements using fundamental and technical analysis. Jumping in and out of markets on a regular basis not only requires constant monitoring of daily events but also requires the skill to act on such events. The message here is that, trying to predict market movements is difficult, if not impossible, so it is best to avoid it.
A number of specialist investment funds managed by BOV Asset Management are sub-managed by Insight Investment Management Limited, one of UK’s largest asset managers and a subsidiary of Bank of New York Mellon. Other funds are sub-managed by Waverton Investment Management Limited. This means that your MIP will be accessing a professionally managed investment fund.
It is important that before taking any investment decisions, you discuss your financial situation and investment goals with a licensed financial advisor to ensure that your investment is in line with your objective and risk appetite.
For further information on the full range of BOV Asset Management funds, please click here
Published on Engineering Today - January 2017