Investment Planning

Investment planning focuses on identifying effective investment strategies according to an investor’s risk appetite and financial goals. There is a wide variety of investment options, including stocks, bonds, ETF’S mutual funds, bank deposits (CD’s), real estate and options. Each of these have different characteristics and a good investment plan will usually contain many or all of these. Through investment planning, one can identify the most appropriate portfolio mix to help you meet your objectives.

Investment Planning: What we do

By helping you set out clear and measurable goals and objectives, we can match the most suitable mixture of investments to each specific goal in the most efficient way. At Davinci Capital Partners we accomplish this by doing the following:

Determine your investment profile

This can be done by considering your risk appetite. There are mainly four types of investment profiles:

  • Conservative (Low Risk Tolerance): Such portfolios comprise mainly (about 70%) of income assets, such as fixed interest and cash.
  • Balanced (Average Risk Tolerance): This refers to portfolios with an equal emphasis on growth and income assets.
  • Growth (High Risk Tolerance): Such portfolios comprise mainly (up to 80%) of growth investments, such as stocks and foreign currencies.
  • High Growth or Aggressive (Very High Risk Tolerance): This refers to portfolios with more than 90% of the funds in growth investments.

Determining your short, medium- and long-term goals

Different goals have different focus. Investors aiming at long-term goals focus on capital growth. A long-term investment will allow you to tide over rough times without changing your plans. Stocks, ETF’s, mutual funds, and real estate represent investment options for long term capital growth. On the other hand, if you're investing to meet a short-term goal or using the flow of funds to supplement your current income you should opt for income investments. These investments generate a regular flow of income in the form of dividends and interest and include dividend paying stocks or ETF’s, fixed-income investments, such as bonds and certificates of deposit (CDs). While making a selection, you should consider the tax implications.

Determine tax implications

While creating and investment plan it is important to consider the tax implications related to it. In particular, the amount of income an investment provides and the burden of income tax on that income should be given a serious thought. Investors in small income brackets intend to maximize the cash returns on their investments and hence they are hesitant to take excessive risks. On the contrary, investors who are not particular about cash income do not consider tax implications seriously.

Maintaining Purchasing Power

Investment is the employment of funds with the objective of earning income or capital appreciation. In other words, current funds are sacrificed with the aim of receiving larger amounts of future funds. So, the investor should consider the purchasing power of future funds. In order to maintain the stability of purchasing power, the investor should analyze the expected price level inflation and the possibilities of gains and losses in the investment available to them.

We review your investment plan regularly: This helps in fine-tuning a portfolio to suit your current financial situation and a change in risk preference