Investors missing the boat on volatility

Investors missing the boat on volatility

Investors are failing to capitalise on market volatility by allocating assets to overseas markets, says William Buck. 


Todd Stanford, principal of accounting and advisory firm William Buck, said investors are missing out on opportunities to grow their wealth through investment in volatile global markets. 

“While global shares over the past year benefited significantly from the weakening Australian dollar, there are still compelling reasons to seek international investment opportunities.”

Mr Stanford reinforced the importance of diversification, suggesting that investors need to utilise at least five asset classes, and often up to eight, with allocations to both local and overseas equity markets. 

“Other asset classes that should be considered in a diversified portfolio include quality bonds (both local and global) with terms up to five years, core infrastructure assets and emerging market shares all accessed via low cost managed funds or listed exchange traded funds. 

“Investors need to ensure they have all asset classes working for them at the one time,” Mr Stanford said. 

In a statement, William Buck pointed out that according to the MSCI All Country Index (ex-Australia) over the past 12 months to 31 August 2015 global shares as measured in Australian dollars returned 26 per cent compared to negative three per cent domestically.

"Investors are missing out on increasing their nest eggs by not understanding and taking advantage of the opportunities in overseas markets, particularly in the current volatile market conditions both here and overseas," Mr Stanford said.

 

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