Wealth accumulation planning addresses an individual's investment needs, asset allocation, and the suitability of different types of securities in light of your goals and risk tolerance. It also involves the choice of securities for your investment portfolio. Basic securities are stocks, bonds, and unit trust funds. Separately managed accounts, indices, option strategies, short-term assets, and annuities may also be used to optimize the portfolio.
It should also address the the challenge of the risk of losing capital and purchasing power simultaneously. Thus effective application of asset allocation stategies to minimise risk and maximise returns are essential in this process.
Some key questions that need to be answered are
- is the asset allocation appropriate?
- what is the actual rate of return compared to the expected rate of return?
- are your regular (monthly or yearly) savings as per your target ?
- have provision been made for major purchases in the coming months?
Adequately addressing the above mentioned areas may ensure minimal disruption to your long term accumulation plans.
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