How to plan an investment portfolio

How to plan an investment portfolio
February 26, 2018 Editorial Team

An investment portfolio is a collection of assets owned by an individual or by an institution. These assets can consist of anything from real estate to gold. However standard investment portfolios are normally made up of mainly of securities, such as stocks, bonds, mutual funds.

Before you begin building your investment portfolio, it’s important that you jot down absolutely everything you own. Include assets such as cars, stocks, bonds and cash bank accounts. A balance sheet outlining your current financial state is a necessity and it is important that you are brutally honest as this is a crucial element in building your net worth.

With that in mind, here are some tips on how to best plan your investment portfolio.

Understand the risk

Before you set your investment goals, it’s important that you determine exactly how much risk you want to take in order to achieve investment goals.

There are two factors that affect risk tolerance the amount of time you have to invest and your attitude to risk. Long-term investments generally ride through the market’s ups and downs over time. Meanwhile, short-term investors take a more conservative approach because investors don’t have time on their side.

Define your goals

Next up, you need to set your investment goals. Your investment goals should be broken up into short, medium and long-term goals. A short-term goals might be planning for a wedding or buying a car in the next six months to two years. A medium-term goal may be buying a property or saving funds to start a new business in the next two to five years. Meanwhile a long-term goal, such as saving for retirement or a child’s education, is more than five years away.  

Type of investments

There are many types of investments and investing styles to choose from.


  • Conservative or cash options: this option suits investors that want to minimise risk
  • Aggressive or growth options: often suits investors that want high returns and are willing to ride any fluctuations in the market
  • Balanced options: this contains a mix of conservative and aggressive options.
Investment type General risk-return level
Cash which includes savings accounts and term deposits Low risk and low returns. Suits investor that doesn’t want to take on too much risk.
Fixed income which includes bonds and debentures Low risk but investors should note a link to the inflation rate. Suits an investor who doesn’t want to take on too much risk.
Property Moderate to high risk. Suits investors that want to see high returns and are prepared to see out fluctuations in share market.
Equities which include shares High risk due to economic fluctuations. Suits investors that want to see high returns and are prepared to see out fluctuations in share market.

Investing with super

Superannuation offers some tax breaks you simply cannot get anywhere else. If you are planning to access your superannuation money before retirement, then investing outside of super will probably suit more. Read more about the latest superannuation legislation here.

Review regularly

The investment landscape changes; tax rules around investment are consistently updated, new opportunities arise and the value of your investment can change overnight. Whatever your strategy is, it’s not set-and-forget, you will need to regularly make sure your investments and your goals are congruent.


In today’s financial marketplace, a well-maintained portfolio is vital to any investor’s success. Our experienced team of financial advisers can help you find the right financial solutions to help build your investment portfolio.