MIDWEEK MONEY: INCOME GROWTH SURVEY: Spread the cash around

INVESTORS WHO are structuring their portfolio for growth have one major advantage: time.

Unlike investors who are seeking an income, the capital growth investor is looking for jam tomorrow and can even use any income generated to help build up his or her capital. In today's volatile investment markets, that can mean there are bargains to find. But most capital growth investors are deferring the time when they want their investment portfolio to generate income.

A typical investor is someone below retirement age, who is looking to build up as much capital as possible before they retire. In their retirement years they will probably want to start converting their investments into cash to supplement their pension income.

The first thing for any capital growth investor to consider is when they will need access to the capital. Someone with a pounds 50,000 portfolio is likely to want to keep a proportion in easy-to-get-at investments, and preferably ones with no penalties for doing so.

Bank and building society investments are ideal for this purpose, although they will need constant monitoring, as not every organisation tells its customers when a better interest rate may be available. For the rest of the portfolio, a little homework is required. The key questions to ask yourself are:

n How long do you want to invest for? Someone retiring in two years' time will have a very different portfolio from someone planning to retire after 30 years.

n What is your attitude to risk? Some investors are just not comfortable with having no guarantees of what their money is worth, or being unable to get at it without penalty. But such caution has a price, as guarantees and capital protection cost money.

The key is to have a spread of risks, and the simple rule is that the more you have, the more you can afford to speculate. Pooled investments such as unit and investment trusts also help to spread risk.

The capital investor also has the luxury of investing for the long term, so he or she can afford to sit back and ignore any short-term price volatility - and that means acting before the market moves, rather than afterwards.

n What is your tax position? You should never make an investment just because of its tax efficiency, but tax is an important consideration. Wherever possible, consider investments that pay less tax than you do, and that will not give rise to a tax charge every year, especially if you are a higher-rate taxpayer.

For someone with pounds 50,000 to invest, what would be the ideal portfolio? Much would depend on their answers to the three questions above, but the starting-point would be perhaps pounds 10,000 on deposit. After that the cautious investor might look at Tessas, which are tax-free five-year deposits, but be warned: this is the last year to invest in either Peps and Tessas, so you need to get your money down before next April when the less tax- efficient ISAs come in. After that there is a range of investments, which include:

n Growth unit trusts: Pooled investment in equities that invest in low- yielding investments.

n Investment trusts: Firms that invest in equities. Some specialise in capital growth only.

n Insurance investment bonds: Insurance-linked investments that offer a lower tax environment to higher-rate taxpayers.