close

Click here if you are a financial adviser or paraplanner. Here we aim to provide you with appropriate information and updates, including our firm, our range of retail Funds, and our investment insights. I confirm this is my client type and I agree to and will comply with the Terms and Conditions of this site.

close

Click here if you are a member of the public or an individual investor or self-managed super fund. Here we aim to provide you with appropriate information and updates, including our firm, our range of retail Funds, unit prices, and distributions. I confirm this is my client type and I agree to and will comply with the Terms and Conditions of this site.

close

Click here if you are a professional investor (e.g. superannuation fund officer or asset consultant). Here we aim to provide you with appropriate information and updates, including our range of institutional investment strategies, our investment professionals, and our investment insights. I confirm this is my client type and I agree to and will comply with the Terms and Conditions of this site.

close

Click here if you are an independent or dealer group researcher, or a platform provider. Here we aim to provide you with appropriate information and updates, including our range of retail Funds, performance, reports, and our investment insights. I confirm this is my client type and I agree to and will comply with the Terms and Conditions of this site.

Volatillity: past, present and future

20 October 2016 | Invesco

To have a true system of checks and balances in a portfolio, investors should include a variety of asset classes, so that volatility in one asset class doesn’t dominate the outcome of the entire portfolio.

In the US system of government, one of the most important concepts is the separation of powers. The Executive Branch, the Legislative Branch and the Judicial Branch were intentionally designed to provide us with a system of checks and balances, so that one branch does not hold a disproportionate influence on the future of the country. The same concept holds true for portfolio construction. To have a true system of checks and balances in a portfolio, investors should include a variety of asset classes, so that volatility in one asset class doesn’t dominate the outcome of the entire portfolio. Many investors, however, have a tendency to avoid whichever asset class is underperforming at the moment. But your challenge as an investor isn’t to try to predict or even avoid volatility; that would be an impossible task. Instead, investors should seek to understand volatility’s impact on the markets over the decades and to develop a plan of action that’s mindful of the lessons of the past.

In this piece, we will explore:
- The past: Understanding volatility
- The present: Focusing on what you can control
- The future: Being prepared for what’s to come

Click here to read the article

Tags: Cash