Portfolio construction and investment returns

Messages on July 27th, 2012 No Comments

Investment returns – where have they come from?

Research has shown that about 90% of the return from a typical Pension or Investment Fund is determined by the asset mix – ie the proportions held in equities, property, bonds and cash.

This makes sense if we think of property for example. If the market is strong, then most properties will tend to do well, no matter the location. So it’s the behaviour of the property market as a whole that’s important. The same argument goes for equities and bonds.

Diversifying investments reduces risk

It makes sense to spread your bets by balancing your portfolio with a mix of equities and bonds – if equities fall, bonds are likely to rise, helping compensate for the loss. Of course, adding property into the portfolio will also help diversify the risk.

But what makes a good investment mix? Which mix will help protect your investment portfolio without losing all chance of good returns?

Whether you have a Pension, Investment, Approved Retirement Fund (ARF) or a Regular Savings Plan getting the right asset mix is the key to successful financial planning

Contact Your Local Independent Financial Adviser

Lucas Financial Consulting Ltd are based near Carrickmacross Co Monaghan. As we straddle four counties – Louth, Monaghan, Cavan and Meath we are ideally placed to become your new Local Independent Financial Adviser

Warning: The value of your investment may go down as well as upWarning: Past performance is not a reliable guide to future performanceWarning: Funds may be affected by changes in currency exchange rates


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