Here are a few strategies that could be worth considering if you want higher returns on your investment – but always be conscious of the risk levels involved:
- Allocate a higher proportion of your investment to shares. Although shares have higher volatility, they also can be expected to produce higher returns than defensive assets such as bonds. The difference in return between these types of assets is often called the ‘risk premium’. This is the extra return for taking on extra risk.
- Increase your exposure to higher risk assets. These include investing in smaller listed companies (micro or small caps); unlisted shares (private); shares in less developed markets (emerging markets); or infrastructure funds. These assets may experience greater volatility and you may need to invest for a longer timeframe.
- Use active asset managers. As the term implies, more active fund managers will have a higher potential for increased returns through constantly searching for new or better opportunities.
- Allocate a higher proportion to listed property trusts. Although these are generally low growth (ie. they are expected to keep pace with inflation over time) they have lower volatility and a high and reliable income stream from property rents. Be aware though, their growth may be impacted by changes in interest rates.
- Look at alternative assets, such as hedge funds.
We stress that it may not be appropriate for you to follow some of these strategies and personal and professional advice is essential. Please also be wary of newspaper advertisements and internet sites to ‘get rich quick’… they look and sound very appealing, but there’s no such thing as a guaranteed quick buck.
And who really does know what the markets will be like in 10 years’ time? The future is unknown, which is why any portfolio should be adequately diversified.
Give us a call today on (07) 3040 4840 and boost your investment strategy today.
The advice on this site may not be suitable to you because it contains general information that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information. Please also refer to our general advice warning under contact us tab on our website. The article is based on information available at the time of writing only and therefore care should be taken as to the accuracy of the content.
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