Investment Advice in Canberra & Brisbane

If you are investing without a strategy you are gambling. Okay so you need an investment strategy, what strategy is best for you?

Everyone is generally familiar with investment choices in their normal super funds like “balanced” or “growth”. These terms apply to pooled investments that allocate funds to different assets based on an asset allocation strategy. The asset allocation strategy is based on Modern Portfolio Theory.  This theory is not so modern now as it was first put forward by a man called Harry Markowitz in 1952. The theory hypothesises that assets have certain characteristics and by combining these assets with each other in an optimal way creates an Efficient Frontier. This frontier is how your super funds calculate how much they should have in each asset class to give the best chance of a good return with the least amount of risk. This is a Strategic Asset Allocation.

Times have changed since 1952 and there are more financial instruments that fit outside of traditional asset classes, new asset allocation strategies such as Dynamic Asset Allocation and the technology advances as well as information transfer have changed how the market views change and thus how assets react now may not be in line with past reactions. That is not to say that Strategic Asset Allocation is still not appropriate just that there are strategies that can be layered and tailored.

Strategies need to be fluid to take notice of change but also need to be objective focussed. Talk to us about what your objectives are.

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