Asset Allocation
Studies show that most of the return on a portfolio (about 90%) can be attributed to the choice of assets selected. In other words, the short term effect of timing of the investment or the choice of fund manager adds little in the way of value over the longer term. Most financial planners probably agree that a diversified portfolio of a mixture of assets is the most important thing to get right when designing a portfolio. The mix of assets needs to be set in relation to the level of return required by the client and the extent to which the client can tolerate capital volatility. The different spread of assets and varying risk profiles is known as “Asset Allocation”.
If you have questions on any aspects of financial planning please contact info@critchleys‑fp.co.uk