Diversification is Key

Monday 20th April 2020

We are firm believers in investment portfolios and funds made up of a wide range of different investments and are therefore not reliant on a single type of asset for your returns. This is a Diversified Portfolio.

We felt it would be worthwhile to expand on this topic as the media headlines of indices can make the situation look much worse than it is for your actual funds during these difficult times. Indeed, in the chart you can see how different investment sectors have performed in each calendar year over the last decade. Clearly investing with the benefit of hindsight would be fantastic and you would choose the correct sector each year in advance, but in reality this is very difficult to do, especially when unforeseen events such as we are witnessing now occur.

Therefore, our objective is the middle ground of a diversified portfolio highlighted with the dark blue boxes where you hold a spread of all of the different sectors. The Fund Manager's job is then to apply an over or under weight position depending on the global outlook.

For us it is all about the planning and making sure you have access to cash short term, at times like this, so it doesn't impact adversely on funds being drawn at the wrong time. Our research into good well managed diversified funds is paramount to us hence the systems we use to support our research but also the face to face meetings with fund managers



The value of investments can fall as well as rise and is not guaranteed.