Uncertainty and periods of volatility are an expected part of life as well as financial markets and investors should be considering how to factor these into their investment strategies. While there’s no easy fix strategy that can be used for all investors, effective strategies tend to share a few aspects in common.
Kanish Chugh, co-Head of Sales at ETF Securities, discussed investment strategies for uncertain times with Andrew Connors, Founder and Director of Quilla, one of Australia’s leading independent investment consultants serving financial advisers and institutional investors.
The characteristics of a good investment strategy
A good strategy will be tailored to the individual investor’s needs, goals and circumstances but there are a few aspects that should hold true regardless.
“You can’t avoid diversification. It’s still the only free lunch you get with investing, and what I mean by that is you can invest in two securities that, in combination, mitigate some of the risks of each of those securities individually, without necessarily impacting the return,” says Mr Connors.