An investment strategy to help you build a safe, long-term portfolio

Julie Brownlee, Fsp Invest, 18 Dec. 2014

Tags: asset allocation, benefits of asset allocation, investment strategy, building a safe portfolio, long-term portfolio, investing,



When it comes to investing for the long-term, you must have a plan of action.

You may daydream about what you’ll spend your investment riches on or what you’re going to do when you retire comfortably, but that won’t happen if you don’t follow a strategy to achieve it.

So what wealth building investment strategy will stand the test of time and help you attain your investment dreams?

Asset allocation.

Read on to find out more…



What is asset allocation?


Asset allocation is how you split your money across different assets. For instance, how much you invest in shares, bonds, property, cash and precious metals.

The idea behind asset allocation is that not all asset classes behave in the same way. When one asset class does well, another one may perform poorly.

By having a mix of assets through asset allocation, you can reduce the volatility of your portfolio and protect yourself from financial ruin.

Do this wisely and you can build yourself a safe, long-term portfolio, Amber Lee Mason in Daily Wealth explains.

Ignore asset allocation and put a chunk of your cash into one risky asset and it crashes, it will take you years, if ever, to recover your losses.


How to decide what asset allocation is right for you


Many factors influence what the optimum asset allocation is for you. This includes your age, attitude to risk and your income.

What is important is to have some of your money in stocks and in non-stock market related assets.

Once you decide on an asset allocation for you, ensure your revisit it at least once a year to check your allocation of assets. You might have to sell or buy some assets to bring your allocation back to your original plan.

So there you have it, an investment strategy to help you build a safe, long-term portfolio.

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