Diversification is Essential
Monday, 14 May 2007
Each asset class and sub-asset class behaves in different ways at different times, with each investment in those asset classes carrying some degree of risk. To minimise the risk that any one particular investment can have on a clients’ portfolio (both positive and negative), it is sensible to spread capital over as many different investment options as possible.
Nobody can consistently predict which investments will perform well in advance,
so holding as many individual investments as possible is a sensible strategy to ensure that you at least hold all the ‘winners’. It is the nature of capitalism that over time there will be more winners than losers, and periods of growth will usually be stronger than periods of decline, and will last longer.
Murray Round has undertaken vigorous research to locate appropriate investment trusts which offer the widest range of diversification possible. For example, our clients’ UK share exposure is likely to comprise well over 500 individual companies, which is far less risky than many ‘active’ strategies which typically concentrate portfolios to between 50 and 80 UK companies. Our global share portfolios often hold more than 10,000 companies!
Our research also ensures that these trusts are cost-effective and adopt a structured and patient approach to investing.
Categories: Asset Class Management, Diversification, Research
posted by Murray Round Wealth Management @ 19:26,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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