DIY Investor Magazine
/
2015 Issue
26
This means pound-cost averaging where
sometimes you will buy in peaks but also
in periods of price weakness and the latter
conditions will mean buying disproportionately
more ‘stock’.
Elsewhere, diversification is the watchword to
managing risk but also adjusting allocations to
both protect against risk and take opportunity of
any upsides.
The United States, for instance, is a staple in
many portfolios and has had a decent run over
the last few years.
Growth forecasts remain steady but some
commentators believe the markets are looking
expensive so it might be a moment to take some
profits by reducing exposure. The threat of
deflation could be hedged by ensuring global
diversification and a decent mix of growth and
income orientated investments.
Gold could represent the ultimate refuge in times
of uncertainty and has already started to show
signs of life. It is accessible to investors by way
of tracking Exchange Traded Commodities.
But remember, while a defensive store of wealth,
funds can flow out of the metal as quickly as
sentiment returns.
Its high of $2000 an ounce in the long shadow
of the credit crunch during September 2011 had
slipped back to under $1200 at the end of 2014.
Despite the uncertainty, there are still reasons to
think that 2015 can be a decent year for equities.
Many analysts expect the US led bull market, with
us since 2009, to continue while the weak oil price
could be an unplanned boon for some business
and consumers despite what it might say about
global demand.
But investors need to be braced for a bumpy ride
and adjust portfolios to cope with conditions.
WILL THIS BE THE YEAR
OF VOLATILITY?
THE THREAT OF DEFLATION COULD
BE HEDGED BY ENSURING GLOBAL
DIVERSIFICATION AND A DECENT MIX
OF GROWTH AND INCOME ORIENTATED
INVESTMENTS.
