Five Benefits of Asset Class Investing

As financial advisers, we take on many roles in our clients’ lives, such as; Strategic Planners, Coaches, Trusted Advisers, Counsellors and of course Investment Advisers. In this article, I wanted to highlight the benefits of the outstanding academic investment philosophy we deliver to you. 

 

Based on Nobel Prize-winning academic research:
Asset class investing is based on the science of capital markets. Decades of financial research have identified dimensions of higher expected returns in global capital markets. Our portfolios are structured around these dimensions, which are sensible, backed by data, and are cost-effective.

Speculation is eliminated:
Everyone wants to believe they can pick the next big winner. Sometimes they get it right and the debate would be if it was luck or skill that delivered the result. Research shows, that many a poor soul has come out on the losing side of this approach.

Market timing is removed:
This inclination fuelled by the emotions of fear and greed damages more wealth creation strategies than anything else.

Diversification reduces specific risk:
Diversification is an essential tool available to investors. It enables you to capture broad market forces while reducing the uncompensated risk associated with individual securities.

Strategic asset allocation:
A 10-year study of major pension funds in the US found that 94% of the success of a portfolio was attributed to allocating the right amount of assets to the most appropriate areas. Asset Class Investing provides the building blocks for each individual portfolio to be designed with you in mind.

 

Stephen Lowry (CFP® Professional, DFP, AIF®) is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.

Note: This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.

 

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