A glance at the Table, with its scattered array of shades, quickly highlights how challenging it is to unearth patterns and predict what the years ahead may hold. Last year’s stars at times shine again the next year, and at other times fade out to occupy the bottom ranks.
Looking across the past decade, a number of observations can be made:
Diversified funds, including those offered via savings plans (such as KiwiSaver), tend to have exposure to a collection of the asset classes contained in the Periodic Table. Being well-exposed to growth assets was the recipe for high returns in 2019, but even those investors with relatively conservative portfolios should have had a pleasing year.
We can never tell with a high degree of confidence what the future will hold for financial markets. Their inherent volatility continues to be a reminder of the merits of asset class diversification. For many investors, a key takeaway is the importance of harnessing both time and patience - the big money to be made is often not in the buying and selling but in the waiting.
David Scobie is Head of Consulting at Mercer Investments, based in Auckland.
This article does not contain investment advice relating to your particular circumstances. No investment decision should be made based on this information without first obtaining appropriate professional advice and considering your circumstances.
Principal, Institutional Wealth
David Scobie is a Principal in Mercer's Institutional Wealth business, based in Auckland. He is actively involved in assisting clients with their investment strategy, portfolio construction and implementation. David is also involved in evaluating fund managers, linking in with Mercer's research capability in Australia and globally.
Prior to joining Mercer in 2003, David gained six years of experience at the Reserve Bank of New Zealand where he was a portfolio manager with responsibility for trading US and European bond portfolios. David also worked in the asset and liability management branch of The Treasury as a senior analyst where he monitored the performance of crown financial institutions and companies, and provided strategic advice on a variety of commercial investments. span>
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