Navigating through volatility – Asset Classes
Choosing from a wide variety of investment instruments can be overwhelming – leaving you to wonder if there’s one asset class that consistently outperforms.
Considering historical calendar returns by asset class, it is clear that there is no particular asset class that has consistently outperformed. Rankings changed over time due to economic variables, with the top performing asset class in one year often falling to the middle or bottom of the table in the following year. This is even more relevant in the short-term, for example, local and global property went from being the worst performers in 2020, to the best performers in 2021.
Diversifying a portfolio with a variety of asset classes can be beneficial to take advantage of tailwinds in any period or defending against headwinds.
Markets move in cycles, but the basic principles of investing remain constant. Optimal investing comes down to aligning investment objectives with long- term goals, staying invested over the long-term and investing in a suitably diversified portfolio.
Asset Class calendar year performance:
Maintain your course, stay invested…