You will have heard the term “Time In, Not Timing” when it comes to investing and I would qualify it with the following statement “Diversification and Investment Time Frame”.
When we talk about Diversification in investing, we look at the traditional assets like property, stocks, bonds and cash. In some cases, we may consider more unique investments such antiques, paintings, structured products and Exchange Traded Funds (ETFs). Needless to say, how we allocate our money to each or a combination of these investments can very much depend on when we will need the money and this is where Investment Time Frame plays a crucial role in the selection of traditional assets and the appropriateness of unique investments in a portfolio.
As a financial advisor it is important to establish when a client will need access to their money as this will drive how investments are selected. The selection process will also be determined based on a client’s investment profile which is represented by their previous investment experience and their aversion to market changes and volatility.
