Step 1: Identify your goals

Start your investment journey by defining your destination. Think broadly about what you want to achieve – whether it’s buying a home, securing a comfortable retirement, funding education, or supporting causes you care about. Your goals should reflect both your current situation and your future aspirations.

Here are some things you can think about to get started:

Step 2: Determine your investor profile

To determine your investor profile, there are many aspects to consider. One key factor is your risk profile, which is your ability and tolerance for taking investment risks. There are generally five categories (this may vary depending on the jurisdiction):

Understanding who you are as an investor is an important component of effective asset allocation. Watch this video for a deeper dive into six key factors that shape your identity as an investor.

Step 3: Decide how you will manage your money

Taking what you’ve learned in steps 1 and 2 – ie understanding your investment goals and the factors that determine your investor profile – you should begin to educate yourself on different asset classes, from money markets, equities, and bonds to commodities and foreign exchange. This can help you better understand how they interact and can be used to achieve different goals.  

Once you’ve completed the above, it may be time to decide how you put your plans into action. There are many different ways to approach investing. 

You might want to be invested but have no interest in following market developments, opting either for a discretionary mandate or a simple passive portfolio following global indices. 

On the other end of the scale, you have people who are very interested in investing, spending a considerable amount of time reading, following the markets, and tracking various industries. However, keeping on top of this information can become overwhelming. 

For investors in this category, one option is to split your portfolio into two sections: a ‘hands-off’ segment and a ‘hands-on’ segment.

The level of investment risk depends on the individual investor profile. All investments in capital markets are subject to market fluctuations and carry inherent risks, including the potential loss of the invested capital, up to and including total loss.

For insights on how to stay calm in times of market uncertainty, answers to frequently asked questions, and more investment expertise, explore our articles.

Whichever option you choose, it’s important to implement your strategy with discipline, and manage risk while avoiding emotional decisions. Staying true to a well-crafted plan is one of the keys to achieving long-term success on your investment journey.

To learn how we manage money at Julius Baer, get our Wealth Matters guide below. 

The products and services offered depend on the domicile of the client and the legal entity of Julius Baer.