What is the key to investing in this 'new normal landscape?'
Financial advisory and accounting firm, Findex has jonied those advising a balanced approach in the face of current market volatility.
Findex chief investment officer and vice chairman, Kieran Canavan said "client value-add" didn't originate from superior stock selection but instead came from an "appropriate mix" of growth and defence assets, and alternating that mix.
He said, the mix should be altered both, "on a strategic (five year) forward-looking and tactical (three month) forward-looking basis".
The CIO said he didn't discount selecting good managers who had superior stock selection abilities and managed risks through "effective portfolio construction" but insisted all of those tactics needed to be cost-effective to the end-investor.
Findex, head of investment research, Stefano Cavaglia, said there were three key themes that underline the firm's pillars.
Cavaglia said, firstly in the current climate, while "domestic equity portfolios are highly concentrated, international equities provide a wide range of growth opportunities and offer strong diversification benefits that impact an investor's wealth accumulation strategy."
Secondly he said, "Given the lower return world, we must seek new drivers of performance that can be captured via alternative investments".
Cavaglia said the yield component of property and infrastructure investment made them valuable assets in turbulent markets, and that absolute return strategies should perform well in any environment.
And thirdly he said, "effective risk management" was paramount.
Recommended for you
It can be extremely hard to realise the gains from financial advice M&A, according to Peloton Partners’ Rob Jones, and more could be gained from firms looking inward at their own practice.
With platforms reporting their quarterly results, there is a clear divide in the adviser markets they are targeting, according to platform specialist Recep Peker, and which would be right for your clients.
The Federal Court has imposed a $10 million penalty on Macquarie Bank for failing to prevent and control unauthorised fee transactions by third parties including financial advisers.
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
