Building a Portfolio Unique To Your Circumstances
When it comes to retirement we’re all different. Maybe we don’t want to retire at the age we receive our state pension, individual time horizons will differ. It’s important therefore, to make sure that investments within our pension plans match those horizons and we are not faced with potential falls in fund values just prior to retirement for example.
That’s precisely why we believe that building and reviewing investment portfolios using Modern Portfolio Theory (MPT) to determine appropriate asset allocation is important.
In 1952, Professor Harry Markowitz (Nobel Prize Winner Economic Sciences 1990) published his doctoral thesis “Portfolio Selection” marking the beginning of what is known as Modern Portfolio Theory. He demonstrated that for every level of investment risk it is possible to construct an investment portfolio that mathematically, delivers the maximum investment return.
A portfolio constructed according to MPT will place the portfolio on an “Efficient Frontier” i.e. where for every level of investment risk there is a portfolio with the highest expected return and for every level of return there is a portfolio with the lowest anticipated investment risk.
We also provide additional value in the way that we actively monitor your portfolio to ensure that (as far as possible) it reflects your attitude to investment risk. We also continually review the performance of the funds held and make recommendations to switch them if we feel that their performance is slipping. Our aim is to outperform a weighted benchmark index over the medium to longer term. In other words, in each aspect of our portfolios we aim to outperform the average of each of the individual asset classes represented.
It is worth pointing out at this stage that past performance is not an indication of future returns. Future returns could be better or worse than any figures noted and the value of your fund can go down as well as up.
When it comes to retirement we’re all different. Maybe we don’t want to retire at the age we receive our state pension, individual time horizons will differ. It’s important therefore, to make sure that investments within our pension plans match those horizons and we are not faced with potential falls in fund values just prior to retirement for example.
That’s precisely why we believe that building and reviewing investment portfolios using Modern Portfolio Theory (MPT) to determine appropriate asset allocation is important.
In 1952, Professor Harry Markowitz (Nobel Prize Winner Economic Sciences 1990) published his doctoral thesis “Portfolio Selection” marking the beginning of what is known as Modern Portfolio Theory. He demonstrated that for every level of investment risk it is possible to construct an investment portfolio that mathematically, delivers the maximum investment return.
A portfolio constructed according to MPT will place the portfolio on an “Efficient Frontier” i.e. where for every level of investment risk there is a portfolio with the highest expected return and for every level of return there is a portfolio with the lowest anticipated investment risk.
We also provide additional value in the way that we actively monitor your portfolio to ensure that (as far as possible) it reflects your attitude to investment risk. We also continually review the performance of the funds held and make recommendations to switch them if we feel that their performance is slipping. Our aim is to outperform a weighted benchmark index over the medium to longer term. In other words, in each aspect of our portfolios we aim to outperform the average of each of the individual asset classes represented.
It is worth pointing out at this stage that past performance is not an indication of future returns. Future returns could be better or worse than any figures noted and the value of your fund can go down as well as up.
