Investment Diversification is Key
When you examine investment performance over the long term, there is no obvious pattern. Take Emerging Market funds some years returns are top, some years they are bottom.
The white box represents a simple diversified portfolio where money is allocated equally across all 12 sectors. The white box is much less volatile than other individual asset classes: this reduced volatility is often referred to as the "only free lunch in investing". My clients usually respond back with “don’t put all your eggs in one basket”.
An expert financial adviser, working with a risk profiling tool, can create the optimum mix of assets to meet the long-term needs and risk capacity of each client. Seeking to maximise the return for the level of risk for the client's portfolio.
If you would like an assessment of your own portfolio for diversification and risk. Get in touch, our initial consultation is always at our expense.