All your eggs in one basket or many eggs in many baskets?

There is a quote attributed to John D. Rockefeller; when asked what the market was going to do, he allegedly replied “It’s going to fluctuate.” The chart below supports this, there are few constants in financial markets, but one is the benefit of diversification.

The table below shows the annual returns for a variety of asset classes since the global financial crisis. Even though this was a comparatively benign economic period, with policy rates very low and calm inflation, there has been a lot of variety in asset class leadership and returns.

Source: Bloomberg, FactSet and Waverton.

Taking a multi-asset approach allows you to build a more robust portfolio, where you are less exposed to specific risks. The different asset classes have varying correlations between each other, and diversification means that you are likely to hold some assets that are performing well even if other asset classes are falling. This is even more true if alternative asset classes and investment styles are included, such as real assets and absolute return strategies.

Here at Brooks Wealth we believe diversification of asset, sector and region using a broad range of investment styles and techniques provides the best chance of sustainable long term growth with appropriate levels of risk and volatility.

Ask your adviser about our investment philosophy or get in touch and we will be happy to discuss this with you further.

info@brookswealth.co.uk                       01733 314553                                www.brookswealth.co.uk