Deciding upon trading assets and instruments

Once you’ve decided on portfolio objectives you can begin to think about what trading instruments and assets you’re going to invest in order to reach your portfolio objectives.

Please note this is not the stage of the design process to think about which companies to invest in but to select the most suitable asset/instrument which meets with the criteria specified by your portfolio objectives.

Assets and trading instruments which you can choose are wide ranging.
The following is an example of various assets/instruments which you may consider;

– Shares
– International shares
– Debt / equity hybrid securities
– Property trusts
– Derivative / leveraged products such as options, warrants etc
– Foreign exchange
– Shares futures
– Index futures
– Fixed interest securities
– Managed funds

This list is not exhaustive as we have left out other asset classes such as property, coins etc. as we are concentrating on building a securities investment portfolio.

Each of the asset/trading instruments listed above will have it’s own characteristics which you should be familiar with. Each with their own advantages and disadvantages expose you to different levels of risk which must factor into the decision to invest for your stated portfolio objectives. A portfolio should include investments of the most suitable assets and trading instruments which ensure the portfolio objectives can be reached with the lowest amount or risk exposure.