Risk. It’s a factor that we take into account with almost every action in our lives. To what degree will we risk the investment we chose to make to achieve the return we are longing for? From early on, our risk profiles are defined and shaped by life experiences, and these come to shape not only the decisions we make, but also the long and short term consequences and outcomes. Emotional and financial investments are, in many instances, very similar, both being influenced by where each and every one of us sits on the risk spectrum.

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Now, while not everyone may be financially minded, almost everyone has an understanding of love – or at least the search for love and to what degree they are willing to risk everything for the ideal ‘happily ever after’. So, we take this opportunity to explain financial investments in terms that most will understand; if you know how much you are willing to put yourself out there to find love, then you also have a good idea of where you would sit when it comes to deciding on an investment policy.

Like love, and financial investments, risk is inextricably linked to return: the more you risk, the more you are likely to achieve, or lose. Those that are not comfortable to risk everything upfront will take a more moderate approach, while those that specifically want to protect what they have and not lose anything will probably adopt a protective, conservative approach.

So let’s begin.

For those of us that have no problem walking over to the bar to introduce ourselves, we probably enjoy a little risk, and would probably opt more for an aggressive flexible fund of funds. You obviously want to maximise investment return over the long term (in other words, you are looking for big love), and took a bigger risk at the initial stage, but you know that the more you risk, the more you gain. So why not apply this to your personal finance too, and gain a return of as much as 6% above CPI?

But we also understand that there are those of you that take a little longer to find love, opting to be far more cautious with who you give your heart to. You probably believe that the person you spend the rest of your life with should only add to your current state of love, so a conservative income retail fund of hedge funds would make sense, as it provides an absolute investment return, irrespective of prevailing market conditions (you are guaranteed to find a fair measure of love regardless of what happens) on a risk-adjusted basis (meaning that you are the type of person to take time to assess the situation and rate it on a scale of 1 to 10 before you make a decision) with the aim of giving you your total investment back, with an additional 3%. It’s a cautious approach to love, but you are happy that its protected and grows steadily.

But for the most of us, there’s a little bit of both; we want more than a short-term return (not really into two week relationships), but we also recognise that we may not be ready for an immediate forever commitment. By making a medium to long-term investment into the relationship, we are looking for the preservation of what we have, but also want it to grow – recognising that there will be a few bumps and hiccups along the way. We have a moderate risk profile, and would probably consider an infrastructure balanced fund (you like to invest in something you can see and touch) that, over a five-year period, can achieve as much as 3% growth over CPI.

However, there are also a few other scenarios. We all know people who are very happy to date people that may not live in the same city, province, or country. They appreciate the big picture approach to love and relationships, and recognise that opportunities are not just found within your immediate geographical vicinity. Offshore investments policies are like this; you are looking for love (emotionally speaking) or financial reward (financially speaking) in other places that may hold more opportunities than what is currently available to you.

Then we have those friends that need ongoing assistance from a professional. Both feel more comfortable having their relationship monitored through the ups and downs to ensure that neither of them lose anything, and that the relationship keeps growing and getting better – taking advantage of every opportunity, and being very quick to recognise and deal with a possible problem. Hedge funds are an ideal investment vehicles for these types of people; as they offer an investment policy that is continually monitored by experts to make sure things are optimally structured to take advantage of opportunities in both market buy and sell off situations (the good and the bad times).

Now, as you move through life, your outlook on love and finances will change. There will be times when you are more willing to throw caution to the wind, and times when you feel exceptionally risk averse, so your financial portfolio will evolve with you and change to reflect you at any one time. It is important though to remember that the decisions you make today will have future consequences and will shape the way you live in the future. So, when making an investment policy decision, make it for the life or love you longingly dream of having.

And, because its Valentine’s Day, here’s a song from Rachel Platten to remind you to be grateful for all those loving relationships you have in your life.