Your portfolio needs defenders as well as attackers
Just as a truly great football team needs a strong defence to stop their opponents from scoring as well as the more dazzling strikers who will put the ball in the back of the net, so a balanced portfolio needs some defensive investments to counteract the riskier ones. Defensive stocks, like their footballing counterparts, are not the stars of the show and won’t provide the exciting highs but they are the dependable workhorses, providing regular earnings, and often dividends,
Should my asset allocation change as I get older?
The short answer is yes! And here’s the lowdown on why. Young people tend to take greater risks in life, which explains a lot of things including why adolescents commit more crimes than other age groups, why they are more likely to drink and smoke and why it costs a lot more to insure a car for a teenage boy than for a 70-something grandmother. The reason why teenagers tend to take greater risks is less obvious. It is often explained by saying that young people feel immortal
Why asset class diversification is crucial when investing
Investors who currently have all their money tied up in equities are having a bad time of it. The China crisis on Monday 24th August sent shockwaves around the world causing share prices to nosedive. Immediately after Black Monday the FTSE 100 was down 4.6% with £73.75bn wiped off the value of shares and a similar story played out across the globe everywhere from France and Germany to New York and Tokyo. Markets are still struggling to recover. Those with diversified portfoli
Diversifying investments the easy way – multi-asset portfolios
Any financial guru will tell you that the most important element of any investment plan is diversification. Putting all your investment eggs all in one basket is the riskiest strategy you could take and is to be avoided at all cost. Diversification can be achieved in various ways and at different levels. The first and most important way is asset allocation i.e. dividing your investments in to the different asset classes of stocks, bonds and property. If one asset class is suf
China’s Black Monday – what happened to your investments?
On 24th August, the Shanghai Composite Index (SHCOMP) fell 8% in a single day, plummeting 40% from its peak just a few short months ago in June 2015 after heady gains in the first half of the year. Black Monday not only affected investors in the country itself but has sent shockwaves around the world as billions have been wiped off equity markets prompting panic among investors. Perhaps you have incurred some significant losses yourself? Investing in equities always involves
