‘ Mixing and matching ’
– doing it right amid market turmoil
By Linda Sherlock , Executive : Wealth and Business Development at PPS Advisory Services and Enablement
We all know we should investment money – especially for later in life when we retire . But where does one even start ? How does one “ mix and match ” asset classes amid an extremely volatile economic environment to ensure one ’ s investment portfolio weathers all kinds of market turmoil ? In this article I will explain what goes into these decisions and who can help you with that .
As we reach the mid-year point for 2022 , it has certainly been a roller coaster cycle when it comes to markets and investments , proving to be a challenge for individuals and portfolio managers deciding in which assets to invest .
The adage of “ investing is not a short game ” and being invested through cycles of both bull ( growth ) and bear ( decline ) are wellknown to most investors . However , emotion frequently takes over the rational thinking and decision making at times like these . Understanding the methodology behind how managers select funds , manage asset allocation and mitigate risk is fundamental in ensuring that investors are well-placed to navigate even the most turbulent cycles .
When it comes to managing one ’ s portfolio , asset allocation is a key lever impacting both risk and returns in a portfolio . Empirical studies have shown that each asset class performs and correlates relative to each other . Traditionally these asset classes are cash , bonds , property and equity ( shares ). Overlay these in both a local and global holding and you have further impact on moves in the local currency .
Asset allocation is , therefore , a selection of the right mix of these asset classes with the intention to minimise investment risks and maximise growth potential or enhance returns .
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