One of La Trobe Financial’s Three Golden Rules of Investment is “Patience”. While this may seem overly simple, it encapsulates the importance of bringing a long-term perspective to investing with planning and regular reviews. And what better time for a financial check-in than the start of a new financial year.

Let’s look at five key elements to growing your wealth over time:

Goal Alignment

Most of us will have set long-term financial goals. What are yours? Once you know what your longer term goals are, break it down into smaller chunks: what are your investment goals for this financial year? For this coming quarter? When do you want to reach your long-term financial goals? Once you’re clear on your financial goals, then comes the harder question: are your investments aligned with achieving your short and long term financial goals?

By aligning your investment strategy with your financial goals, you can make more informed decisions and stay focussed on what you want to achieve and when you want to achieve it.

Risk Assessment

Evaluate your risk tolerance and understand the level of risk you are comfortable with. Different investments carry varying degrees of risk and it’s essential to find a balance between risk and potential returns. Has your appetite to risk changed in the time since you made investments across your existing portfolios? If so, you may need to consider rebalancing your investments to obtain the amount of risk weighting you are comfortable with.

By aligning your investments with your risk profile, you will minimise the potential for unwanted or undigestible surprises across your investments.

Asset Allocation

Review and adjust your asset allocation strategy. Asset allocation involves dividing your investment portfolio among different asset classes, such as stocks, bonds, real estate, credit and cash. Determine the optimal mix of assets based on your financial goals, your risk tolerance and market conditions. Regularly review and, where necessary, rebalance your portfolio to maintain the desired allocation.

By reviewing your asset allocations, you will ensure your assets meet not just your risk profile, but they suit your strategy and desired investment timeframes.

Investment Research and Due Diligence

Conduct thorough research before making any investment decisions. Remember: you have worked hard for your money and you need to ensure you’re investing your money in a manager who you can trust to deliver your desired investment outcomes.

Ensure you understand the performance profile, underlying investment fundamentals, investment structure and potential risks. If an investment is hard to understand, skinny on details or looks too good to be true, then it probably is. Look to invest with a manager who provides readily available portfolio details. Ascertain what role that particular investment strategy is playing within your portfolio, and ensure that the investment manager is well equipped – with demonstrable performance history – to deliver that outcome.

By ensuring you understand how your investments fundamentally ‘work’, you know what is driving your investment success.

Regular Monitoring and Review

While a new financial year is a good time to take stock, continue to stay actively engaged with your investments throughout the year. Keep track of any news or events that may impact your investments, however also remember to look through the noise. In our digital world, headlines have become more sensationalised to support tracking of article click throughs.

By continually monitoring your progress, you give yourself the best chance of staying on track.

Remember, investing is a long-term endeavour and it’s important to have patience. That’s why Patience is one of our Golden Rules. Avoid making impulsive decisions based on short-term fluctuations, and seek professional advice as needed to continuously educate yourself and inform your thinking.

By focussing on these key elements, you will be starting the new financial year with a well-structured investment approach, giving yourself the best chances of achieving your financial goals.

La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence 222213 Australian Credit Licence 222213 is the responsible entity of the La Trobe Australian Credit Fund ARSN 088 178 321. It is important for you to consider the Product Disclosure Statement for the Credit Fund in deciding whether to invest, or to continue to invest, in the Credit Fund. You can read the PDS and the Target Market Determinations on our website or ask for a copy by calling us on 13 80 10.

La Trobe Financial Services Pty Limited ACN 006 479 527 Australian Credit Licence 392385.

To the extent that any statement in this article constitutes financial product advice, that advice is general advice only and has been prepared without considering your objectives, financial situation or needs. You should, before deciding to acquire or to continue to hold an interest in the La Trobe Australian Credit Fund, consider the appropriateness of the advice having regard to your objectives, financial situation or needs and obtain and consider the Product Disclosure Statement for the Fund.

© 2023 La Trobe Financial Services Pty Limited. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial.

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