Most who are familiar with the Strategic Asset Allocation (SAA) would also understand that most, investors rely on this strategy, whether they know it or not, this is how the bulk of financial advice is delivered when it comes to allocating funds. Your typical allocation is 60% growth and 40% defensive, this particular allocation, give or take, is termed a balanced allocation. Growth assets such as equities and listed property trusts 60%. Defensive Bonds and Cash 40%
Take it from me, I advise clients every day on this particular way of allocating assets to a portfolio for the long term, taking into account their particular risk nuances, why, because we know it will provide returns in excess of the cash rate over the long term.
Now here we are, at this point in time very few living people that have witnessed falls in their growth assets of this magnitude. (Even the ones who had further diversified into absolute returns funds, non-correlating aka hedge funds.
So what do we do, we increase our exposure to equities and re-balance the portfolio because you are no longer a balanced investor (now an unbalanced investor) due to the lower equity values and are overweight cash and bonds, simple !
Mind you this theory has held true for a very long time and I believe it will continue to hold true for a very long time constantly seeking alpha.
So what, you might say, does this have to do with forex ?
This is the place where you become responsible for your own actions and this is the "beauty" I believe that attracts so many to this particular market. This is where you can make your own "aplpha" you are not relying on others, financial advisers, SAA etc to make your profits. I believe a well thought out long term strategy in the forex market can add to your diversification and future wealth.
I believe this is entirely possible. I have looked at many strategies here at the forexfactory alone, where the particular strategies success can be proven without too much difficulty.
Draw downs are a fact of life and it is only now that people are realising this also applies to equity and other markets.
So what I am saying, is that the forex offers diversification away from all other classes of assets. When mastered can lead to a truly alternate asset class that can provide both growth and income like any other asset.
I would like to hear from others who believe, that as I do, the forex can be become another "asset" that can provide income and growth like any other asset.
Mattfx
Take it from me, I advise clients every day on this particular way of allocating assets to a portfolio for the long term, taking into account their particular risk nuances, why, because we know it will provide returns in excess of the cash rate over the long term.
Now here we are, at this point in time very few living people that have witnessed falls in their growth assets of this magnitude. (Even the ones who had further diversified into absolute returns funds, non-correlating aka hedge funds.
So what do we do, we increase our exposure to equities and re-balance the portfolio because you are no longer a balanced investor (now an unbalanced investor) due to the lower equity values and are overweight cash and bonds, simple !
Mind you this theory has held true for a very long time and I believe it will continue to hold true for a very long time constantly seeking alpha.
So what, you might say, does this have to do with forex ?
This is the place where you become responsible for your own actions and this is the "beauty" I believe that attracts so many to this particular market. This is where you can make your own "aplpha" you are not relying on others, financial advisers, SAA etc to make your profits. I believe a well thought out long term strategy in the forex market can add to your diversification and future wealth.
I believe this is entirely possible. I have looked at many strategies here at the forexfactory alone, where the particular strategies success can be proven without too much difficulty.
Draw downs are a fact of life and it is only now that people are realising this also applies to equity and other markets.
So what I am saying, is that the forex offers diversification away from all other classes of assets. When mastered can lead to a truly alternate asset class that can provide both growth and income like any other asset.
I would like to hear from others who believe, that as I do, the forex can be become another "asset" that can provide income and growth like any other asset.
Mattfx
Without women, money would have no meaning - Aristotle Onassis