Following the Multimanager moves

clock

Question: We have spent some time setting out our ‘Asset Allocation' models and we were planning to use a ‘Multimanager' approach as a core holding. Now, with all the fuss over managers moving, and the uncertainty in the market, we wonder, should we be holding off on implementation? SC - Essex

Answer Dear SC, I think the underlying point here is that advising clients to invest in markets that are unstable, or have fallen, is difficult, no matter what the books say. Clients often want to sell out when the asset drops, and buy when it is high. And then wonder why they lose money. I’m going to tell you what you already know. The key to a successful asset allocation policy is NOT to change it. The research tells us that over 90% of the return on a portfolio is from the asset allocation. If you believe that, then any attempt to ‘time’ the market is in danger of creating a ‘buy high...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on uncategorised

Building Society-owned Newcastle Financial Advisers acquires Openwork firm

First of a number of acquisitions

Hannah Godfrey
clock 09 December 2019 • 1 min read

Bond managers fear hedges being undermined as liquidity dries up

The recent sell off in the bond market and growing liquidity issues have forced bond investors to use similar hedging techniques, undermining their effectiveness and causing concerns about how much downside protection funds really have.

Anna Fedorova
clock 03 July 2013 •

Police launch investigation into mortgage middleman fined £1m

West Midlands Police have launched a fraud investigation into a Birmingham financier over his role in sale and rent back agreements.

clock 25 June 2013 •