Haven’t reviewed your investment mix recently? You could have missed out on 15%

For many of us the secret to financial freedom will, in one way or another, involve earnings from investments.

More often than not, our journey to achieve that freedom can take us along unexpected paths, which is why regularly reviewing your investments is one of the easiest ways to keep your plans on track and work towards achieving your financial goals.

Just as our needs and circumstances change over time, you can probably count on your portfolio looking different year on year; and the investment decisions you made last year may no longer match up to your overall plan.

One of the key characteristics we encourage clients to periodically review is their asset allocation within the portfolio – specifically that it’s well diversified and your eggs aren’t all in one basket. We recently assisted one client whose portfolio was heavily skewed towards property – through both direct property and listed property trusts, and were reminded of the importance of this investment fundamental.

Property has been a popular form of long-term investment in Australia in part because it’s relatively easy to understand compared to some other forms of investment. However, diversification of assets within your portfolio is an important part of minimising risk and reaching your long term goals.

After gaining an in depth understanding of our client’s goals and their current situation, we worked with them to liquidate some of these property assets to diversify their portfolio. Up to today, the client has now achieved a return of 8.6% over a 7 month period, and by diversifying their portfolio we prevented a loss of 7.21% over that same 7 month period – a total benefit of 15.77% over the 7 month period.

Very rarely do things ever stay the same – which is why the decisions we may have made when establishing our investment portfolio may no longer reflect our age, stage, goals, or the economic climate.

If it’s been a while since you reviewed your investment mix, I’d enjoy the opportunity to continue the conversation with you, and encourage you to book in for our complimentary review  where we’ll discuss:

  • Is your investment mix right for your age and stage?
  • Are your investments sufficiently diversified?
  • Are you balancing the risk and return required to achieve your goals?
  • Is your superannuation fund performing as best it should?
  • Will your superannuation end up in the right hands?

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The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions. Liberum Financial and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.