Finance - Asset Allocation

Asset Allocation

Any investment proposal you are considering should have a defensive mechanism, to ride out any market falls. In other words, do not put all your eggs in one basket. Furthermore, because of the threat of inflation, a small equity exposure is beneficial to take advantage of any market rises.

To balance out the risks, capital should not be invested in a single product. The correct allocation of the funds into various products will reduce reliance on one market sector. Also important is that clients with sizeable assets definitely look into the concept of a managed portfolio.

In any conservative portfolio, at least 10 percent of the investment should be kept in cash in case of an emergency. And it is helpful to know that income requirements can be drawn from sovereign or corporate bonds, with an equity exposure providing the potential capital growth.

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