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An investment portfolio is an accumulation of investment assets including stocks, bonds, mutual funds, hedge funds, commodities, property and cash. Broadly speaking, these can be split into three investment categories: Traditional Investments incoroprate the use of stocks, bonds, currencies and cash or a combination of these in collective form—commonly known as mutual funds. Alternative Investments use traditional investments but also include trading strategies and financial instruments designed to make gains in both rising and falling markets. These are often referred to as Hedge Funds and usually have a very low correlation to traditional stock markets. Property Investments include property purchases, syndications and collective mutual funds investing in commercial property.

When building your portfolio you need to establish your investment time frame, risk profile, and ultimate country of residence in retirement. It is best to invest in the currency of the country you intend retiring to, so to avoid unnecessary foreign exchange risk. Lump sum or regular monthly investing? For lump sums of money, this could be accumulated savings, a bonus, an inheritance or a property sale. You need to decide whether to adopt the “hands on” approach to managing your money, or having your money managed for you and releasing the burden of time and worry in making the “right” decision. Typically, investors choose this route because they neither have the time or knowledge to make investment decisions.

Save gradually within your means
Regular saving from monthly surplus income requires discipline. This is important to meet core financial planning objectives such as retirement, education fees, mortgage repayment or reaching financial independence. A gradual accumulation of wealth from as little as $150 per month, will go some way to the achievement of your objectives.

Dollar-cost averaging is the common name for a strategy in which you invest a fixed amount of money at regular intervals in the same investment. Your fixed amount buys more units when prices are low, and fewer units when prices are high. A fixed and affordable level of commitment makes sure that key financial objectives are achieved.

Take advice
We live in the information age and the internet is especially useful if you have the time to research. For many of us though, taking advice from suitably qualified advisers who have in-depth knowledge and access to the world’s best fund management groups, different asset classes and currencies, provides peace of mind as you can ask more questions on your own specific situation.

Reviewing your portfolio
So you have made the effort, you have done the research, you have taken advice now don’t just ignore all that hard work. Make sure you get regular reports on how things are doing. Be prepared to make changes as this is your money and you should be keen on making sure it is working hard to provide you with the lifestyle you aspire to. Markets move on a daily basis so you should review your portfolio ideally every six months.