Isaac Moledi
Isaac Moledi
With the market experiencing a few jitters, up 3percent one day and down 3percent the next, what should you do as an investor to meet your return objective?
An ideal solution, according to Mark Seymour, of Alphen Asset Management, is for your investment to be managed in full sothat you meet your return objective at an appropriate risk.
l If you are a long-term investor seeking maximum capital growth, you need to be exposed to a highly skilled equity manager.
l If you seek capital growth but cannot tolerate large negative movements in your capital then you should be exposed to an actively managed portfolio, for example an asset allocation unit trust.
l If you seek capital growth marginally more than inflation and have a low tolerance for negative capital movements, you need a portfolio with low weightings in riskier assets such as equity and, to some extent, property.
But how do you choose the correct portfolio?
l Find out what the portfolio's benchmark is;
l Find out the portfolio's long-term return objective;
l Find out how long one needs to be in the portfolio to meet the return objective;
l Find out what short-term draw-downs could take place.
"If these factors fit your expectations, you have a possible match," says Seymour.
Ensure the chosen investment manager follows a tried and tested process. It is recommended that the manager has managed money through a bear and bull cycle.
Invest to suit goals
Isaac Moledi
Isaac Moledi
With the market experiencing a few jitters, up 3percent one day and down 3percent the next, what should you do as an investor to meet your return objective?
An ideal solution, according to Mark Seymour, of Alphen Asset Management, is for your investment to be managed in full sothat you meet your return objective at an appropriate risk.
l If you are a long-term investor seeking maximum capital growth, you need to be exposed to a highly skilled equity manager.
l If you seek capital growth but cannot tolerate large negative movements in your capital then you should be exposed to an actively managed portfolio, for example an asset allocation unit trust.
l If you seek capital growth marginally more than inflation and have a low tolerance for negative capital movements, you need a portfolio with low weightings in riskier assets such as equity and, to some extent, property.
But how do you choose the correct portfolio?
l Find out what the portfolio's benchmark is;
l Find out the portfolio's long-term return objective;
l Find out how long one needs to be in the portfolio to meet the return objective;
l Find out what short-term draw-downs could take place.
"If these factors fit your expectations, you have a possible match," says Seymour.
Ensure the chosen investment manager follows a tried and tested process. It is recommended that the manager has managed money through a bear and bull cycle.