Selecting the best mix for your charity
Before deciding on the blend of asset classes that best suit your needs, it’s important to:
- Know what your charity wants from it's investment
- Know the level of risk your charity is willing to accept
- Remember that a healthy portfolio can include different asset classes
Generally speaking, if you’re willing to take more risk with the goal of achieving a higher level of return from your charity's investment, your portfolio may hold more equities (shares of ownership in a company).
You may want to increase the percentage of bonds you hold if:
- your priority is to take a lower amount of risk with your money compared to investing in equities
- you’re comfortable with lower growth potential in order for your charity's investment to have the potential to generate a regular income
No asset class is free from risk. Using the different characteristics of each asset class in a balanced portfolio can help to smooth fluctuations in performance and balance risk.
The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.