Given the precarious state of international affairs, we financial advisers would be fools to try and predict how the markets will react.
Yes, we might have opinions on the state of the financial landscape, but trying to work out which asset classes will top the charts is a little like picking a winner in the Grand National. The same can be said for which countries will produce the best results.
A global outlook
As you probably know, we advocate holding a diversified portfolio of investments to create a healthy return over the medium to long term. This not only refers to what you invest in, but also where in the world these stocks are held.
Some investors, however, try to identify the countries that will outperform others, to reduce their exposure to falling markets. This is not a good strategy, particularly in such turbulent times.
Investment opportunities exist around the world and we try to take advantage of this when building you a diversified portfolio. For example, your attitude to risk is one of the determining factors in selecting how much stock is held in emerging markets. However, the randomness of global stock makes it almost impossible to figure out who will be the winners and losers in any one year.
Trust in the law of averages
So, why am I telling you this?
Because it is beneficial to understand how your portfolio is structured in terms of global spread, but there’s no need to obsess about where the best returns will come from. There is simply no way of knowing which countries will do well in the next few months, or indeed across the next five years, so don’t waste the time and energy.
By ensuring you hold a mix of equities from around the world, we put our clients in the best position to capture the highest returns when they appear. Likewise, this spread helps offset lower returns elsewhere.
Successful investing means taking a long-term view, giving you the time and space to ride out the vagaries in the market. Instead of trying to predict the unpredictable, focus on what you can control. Work with a financial adviser to establish your life goals and let them create a plan that will get you there.
If you’d like to learn more about Belmayne’s approach to investing or arrange a review of your current retirement provisions, don’t hesitate to contact us on (01246) 298181 or email: enquiries@belmayne-ifa.com
