'Back-to-basics' approach key to reducing risk - Perpetual

Perpetual Private Wealth has predicted a return to 'back-to-basics' investing amid a volatile market.

General Manager of Perpetual Private Clients Nick Langton said a focus on traditional strategies will help to shield investors from any additional risk.

"Put simply, if you don't understand an investment, you can't understand the risks," Langton said.

"This still rings true, and we expect to see highly leveraged or speculative investments continue to fall out of favour," he said.

Perpetual said risk will continue to play a major role when investing, and it should be considered with regards to a client's complete financial situation, and not just their investment portfolio. 

"While it may not always be fashionable, it's a tried and tested philosophy", Langton said.

"It includes choosing appropriate structures such as trusts or companies to hold assets, as well as tax and estate planning strategies," he said.

Langton said that having a strong foundation is the key to riding out the storm of uncertainty in a fluctuating market.

"It's a basic fact - sharemarkets grow in value over the long term, so the best advice is to make decisions that are consistent with your overall financial plan rather than responding to short-term movements," he said.