Wealth Management

Diversification

Diversification across multiple asset classes  (such as bonds, equities) and across countries is a key investment philosophy for us.

The origins of diversification within

the context of investing, lie in

the work of Nobel Prize winning

economist Harry Markowitz. He

described diversification as the

only “free lunch” when seeking

investment returns, but the concept

has been around for hundreds of

years in other domains of life.

The good old saying “don’t put all

your eggs in one basket” apparently

has its origins in the Spanish novel

Don Quixote. This was first published

in 1605, and is considered one of the

most influential works of literature

from the Spanish Golden Age.

Diversification is as powerful today as

it was in the Spanish Golden Age! It is

indeed one of the few timeless

investment strategies

Time in the Market

Investing is a long-term game. And

from time to time, the investment

markets experience a period of

decline. It’s important that you stay

invested during these unavoidable periods.

Past performance has shown us that each market decline is followed by a recovery which exceeds the previous decline, both in terms of cumulative return and duration. While historic data is not a predictor of future returns, it offers valuable insights

into the cyclical nature of markets.

Markets will inevitably experience

declines but it’s important not to panic

and exit the market when these crises

arise.