Three tips to effective asset allocation

If the events of recent years have taught us anything it is that having all your eggs in one basket is not a good idea. Although equity investors have enjoyed strong gains this year, the rollercoaster ride of 2011 is a reminder the world remains an uncertain place. Government bonds have long been considered a safer investment, but with interest rates at historic lows, yields provide very little protection against inflation. Similarly, cash remains vulnerable to negative real rates of returns given current levels of inflation exceed short-term deposit rates in much of the developed and d...