Diversification

The key to enhancing performance while reducing volatility in the overall portfolio. Consider:

• diversifying across asset classes
• within asset classes, diversifying across investment styles
• diversifying across managers within the different investment styles – even the best managers do not stay on top forever

Education

Will help you prepare for volatile times. Remember that to achieve long term growth you will need to endure volatility in the short term. If the right investment options are made initially, you will ride it out.

Time rather than timing

It is best to avoid knee-jerk reactions in volatile times. Remember, you are investing to meet a long-term goal, not to avoid a short term loss. Disregarding your strategic asset allocation can be detrimental to your returns and may increase real risks.

Capital protected strategies

Investors approaching retirement may be uncomfortable with the prospect of capital losses in volatile environments – they need to continue to hold growth assets to help grow their savings.

Dollar cost averaging

The investment of fixed amounts into the markets at regular intervals, regardless of market conditions. This reduces the risk of investing at the top. Followed strictly, this strategy helps remove emotional decisions, making it easier to stick to a long term investment plan.

Rebalancing

Ensures the portfolios’ risk and return profile is retained while removing emotional decision making. Rebalancing should typically occur during your portfolio reviews when conducted in conjunction with an experienced and professional adviser.