Investors should aim to diversify their investment strategy to achieve strong returns in a low-interest rate environment, according to Hewison Private Wealth.
Despite low interest rates affecting the net income of cash investors, Hewison has said it is still possible for investors to achieve high returns – if they take a long-term view of their wealth management.
“It’s important for investors not to put all their eggs into the one basket,” Hewison Private Wealth’s director and private client adviser, Chris Morcom, said.
“Anyone who is interested in setting up a successful investment strategy should have clearly outlined long-term goals and take an active responsibility for its management to ensure it is tailored to their needs and capacity for risk, and to the changing market conditions.”
Investors should have a diversified investment strategy that takes into account fluctuations in rates and returns in order to weather the low-income environment, according to Hewison.
Mr Morcom told InvestorDaily that investors, particularly in the self-managed superfund sector, have begun looking towards equity investment as a way to boost their returns.
“Their focus is on investment and trying to maximise their yield and I think what we’re seeing at the moment, particularly as a rotation from cash through to equities, is people chasing that yield,” he said.
However, Mr Morcom said it is important that people look at whether they are paying appropriate prices for shares, not just blindly chasing yield.
“The market’s pushed pretty hard the last few sessions, but who is to know whether people are looking at just the yield or if they’re actually looking at whether they’re paying appropriate prices for shares,” he said.
“At the moment, there are still some pretty reasonably valued companies around but some of the really good yielding stocks are starting to look a little bit more expensive.”
