When you build your portfolio, we generally recommend that you create a well-balanced and diverse set of investments.

But what exactly does this mean? Essentially, there’s not just one type of “investment”. Rather, your wealth can be spread across asset classes – a group of investments which behave in the same way and are subject to the same regulations.

Diversifying your investments can mean you’re not putting all your eggs in one basket, so to speak.

A financial planner will help you create a diversified portfolio in line with your aspirations

When you’re creating your portfolio, there are several considerations to take into account to make sure it’s working as hard as possible for you.

Talking to a financial planner at Servo Wealth can help you find the right balance of strong, sustainable returns and accessibility of wealth.

Together, we’ll look at a range of criteria, such as:

• Objectives and goals – This could be retirement, travel, buying a house, or paying for your children’s or grandchildren’s education.
• Time frame – When you’re likely to need to access your money.
• Attitude to risk – Some investments carry a higher risk than others, and we’ll factor in your attitude to loss when we build your portfolio.

From there, we can determine the appropriate mix of assets for you.

Read on to find out more about the four main asset classes and how they can complement each other in a bespoke investment portfolio.

There are 4 main asset classes, each bringing their own set of benefits and drawbacks

1. Cash

Cash is often seen as the safest of the asset classes and is generally the one people are most familiar with. As it’s not invested in the markets, it can be a good counterbalance for some of the more potentially risky assets in your portfolio.

Here, we’re talking about your cash savings accounts and Cash ISAs, which are highly liquid and easy to access, making them a good source of quick funds.

Your cash savings are protected by the Financial Services Compensation Scheme (FSCS), which will compensate up to £120,000 per person at banks, building societies, and credit unions, if the financial institution fails.

While this can offer a sense of reassurance and comfort, the downside is that cash isn’t great for building wealth as interest rates don’t always offer a particularly high return. High inflation can also affect the real-terms value of cash: if inflation rates rise above your interest rates, your purchasing power will fall.

Ultimately, it can be a good idea to hold some cash reserves for easy access or emergencies, but it’s less likely to help you achieve your long-term goals.

2. Bonds

Sometimes also known as fixed-income securities, bonds are issued by companies or governments. In effect, you are lending money to the organisation, either as a government bond or gilt, or a corporate bond.

Governments use these investments to borrow money to pay for services, while other organisations use them as business investments. You could receive a regular income, plus the full value of the bond when it expires.

Bonds can be a nice, steady way to boost your income, plus they are relatively low risk. However, issuers will occasionally default on the loan if they’re not able to pay back your money. Plus, you need to factor in interest rates and inflation to the value of your bond.

3. Equities

Also known as stocks and shares, equities give you a share of a publicly traded company. These are then bought and sold on the stock exchange, with values based around criteria such as company performance, investor sentiment, and economic forecasts.

This means that equities can sometimes be volatile, and the values can rise and fall. Sometimes periods of market volatility can be disconcerting for investors, and it can be tempting to cash in your investments.

However, it’s generally better to stay calm, as over the long term, markets tend to settle. Cashing in too soon means that you could miss out on future returns and expose your cash to the vagaries of interest and inflation rates.

According to Marlborough Group, over the course of 20 years, investing in the markets even on their worst days still delivered better long-term returns than cash savings.

Equities can be considered an important part of your long-term plan, ticking away in the background.

As part of your annual financial review, we can check in on your investments and make any necessary tweaks. However, it’s not a good idea to overcheck on your investment activity, as anything negative can lead to a knee-jerk reaction.

4. Property

Property can form part of your financial plan in a number of different ways. If you own your own home, the value is likely to have increased, and you can access some of this wealth by downsizing or releasing equity. Alternatively, you may have one or more buy-to-let properties that bring in rental income and could be sold for a profit in the future.

Your portfolio could also include investments in commercial property funds.

Property prices do tend to increase over time, so this could be considered a less risky option than equities.

One of the biggest downsides to property, however, is that it can take time to sell, so it’s not a liquid asset.

Property funds can be more liquid, as they are often easier to sell. However, under some circumstances, they can be suspended if investor withdrawal demand is high, in which case you need to wait until the suspension is over.

So, property can be something of a mixed bag. Again, if you include it in your portfolio then it is best to consider this as part of your long-term wealth plan.

Get in touch

Creating a portfolio to match your needs can be complex and is best done with the help of a financial planner. We’re happy to help. Please email us at info@servoprivatewealth.com or call 01444 715200 to find out more.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Any links will direct to a third-party website and Servo Private Wealth is not responsible for the accuracy of the information or content contained within linked sites.

Approved by Best Practice IFA Group Limited on 17/04/2026.