FIIG: Safe harbour investment strategies - Business Spectator
Alan has been a trusted source of investment advice to Australians for many years, and in 2005 he founded Eureka Report - Australia’s #1 online investment report. Along with Robert Gottliebsen and Stephen Bartholomeusz, Alan also founded Business Spectator, the popular business news and commentary website. We set out four strategies below ranging from the current typical equities and cash “barbell” strategy. In highly volatile markets, investors are reminded of how just how fast equity markets can fall. The GFC in 2008 was not that long ago, and many people are still feeling nervous about the 43% fall in equities that year and whether we could see a repeat. The 26% fall in the Chinese market last week reminds us what happens when the fear cycle kicks in. Over the long run, equities will outperform less volatile investments. For the past 120 years, these cycles have been unpredictable ranging from nine to 22 years with near zero gains for equity markets. Whether we are at that point today doesn’t really matter, as we are certainly not at the low valuation points that have sparked the start of a bull run. With this background in mind, it is worth revisiting why bonds are added to a portfolio, that is to reduce portfolio risk in the event of an equities market correction. Source: www.businessspectator.com.au
