Seek strength in diversity
17.05.12
Fund manager Centuria Capital's chief executive, John McBain, sees value in spreading the risk, a philosophy he says that has been "forgotten" in recent years with investors taking too much risk and concentrating too heavily on "growth" investments such as shares and property.
"This is not a new theory. This is a very old theory that's been forgotten," McBain says.
"The fact is, over the past 10 or 15 years, some of the growth investments, take for example shares, have performed very well to the extent where the proportion of people's portfolios that they've occupied has become disproportionate."
While McBain says shares have a place in an investment portfolio, which can be particularly valuable when there is positive volatility, he says the "love affair with Australian equities" is not a solid strategy.
"They don't perform as an investment if they're the sole component of a portfolio," he says. "As a minimum we're in a five to six-year downturn ... and if you leave your investment settings unchanged ... I think that is risky."
Source: NEWS.com.au