What is the key to investing in this 'new normal landscape?'
Financial advisory and accounting firm, Findex has jonied those advising a balanced approach in the face of current market volatility.
Findex chief investment officer and vice chairman, Kieran Canavan said "client value-add" didn't originate from superior stock selection but instead came from an "appropriate mix" of growth and defence assets, and alternating that mix.
He said, the mix should be altered both, "on a strategic (five year) forward-looking and tactical (three month) forward-looking basis".
The CIO said he didn't discount selecting good managers who had superior stock selection abilities and managed risks through "effective portfolio construction" but insisted all of those tactics needed to be cost-effective to the end-investor.
Findex, head of investment research, Stefano Cavaglia, said there were three key themes that underline the firm's pillars.
Cavaglia said, firstly in the current climate, while "domestic equity portfolios are highly concentrated, international equities provide a wide range of growth opportunities and offer strong diversification benefits that impact an investor's wealth accumulation strategy."
Secondly he said, "Given the lower return world, we must seek new drivers of performance that can be captured via alternative investments".
Cavaglia said the yield component of property and infrastructure investment made them valuable assets in turbulent markets, and that absolute return strategies should perform well in any environment.
And thirdly he said, "effective risk management" was paramount.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
