Sunday 24th December, 2006


Make your bonuses work for you

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‘Tis the season to be jolly the old adage goes, and that is true. For a great number of us, it is the season of bonuses, gifts and extra cash. But long after the holiday is over, we need to ensure that our money is earning for us and that our funds are sustainable.

What should we do with those extra Christmas funds? Well, in order to make that decision, let’s go back to the basics of investing. As you already know, there are numerous financial products and services, and while they all make promises of making your money grow, different investors have differing needs and your choice of product should be based on your own personal financial plan.

Firstly, you will need to identify your investment goals. Is it to take an European vacation next year, or to begin a university degree programme, or simply to have a comfortable retirement? The goal that you set will point you in the direction of the best financial instrument to fit your needs.

Once your goals are set, you will need to decide on the time frame in which you would like to achieve them. Your time frame is crucial since it helps inform your decision on which financial instrument will give the best possible returns.

Investors’ attitudes range from very cautious to highly speculative and varying degrees in between. There are some financial instruments best suited to those who are afraid of risk, while other instruments are far more suited to the adventurous investors among us. Once you decide on the level of risk you are willing to take, this will assist you in determining the options you should choose.

With your goal in front of you, your time frame for investment and your risk tolerance in mind, you can then look at the product types best suited to your needs. For example, if your goal is short-term, ie under one year, and you are a very cautious investor; repurchase agreements, fixed deposits and money market funds are best.

These instruments represent relatively low risk with moderate interest rates and growth over this short period. If your time frame can be extended from one to three years, then the possible returns on

these types of investments are much better.

Where your time frame is even longer and your risk tolerance is higher, equity-based funds, stocks, and some bonds provide a great option for higher rewards. The principle here is quite simple, depending on your goal, time frame and risk tolerance, there is an investment product to suit almost every palette.

This season as you make merry, consider your investment goals and let us help you to choose the right investment, of course the time to get started is now!

As we close this column for 2006, I invite you the readers to send in your questions to [email protected] Next year, we will start by answering questions from investors and potential investors.


All information contained in this article has been obtained from sources that DB&G believes to be accurate and reliable. All opinions and estimates constitute the author’s judgment as of the date of the article. No warranty as to the accuracy, timeliness or completeness of this article and as to the opinions based thereon is given or made by DB&G.

DB&G and/or its employees or directors and/or any associated person may have an interest in, or interest in the acquisition or disposal of, the securities or class of securities mentioned herein.

Call 1-888- CALL DBG if in doubt about the content of this article. Decisions based on information contained in this article are your sole responsibility.

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Designed by: Randall Rajkumar-Maharaj · Updated daily by: Sheahan Farrell