People usually invest in things they like and know. That is why most investments are made in the country or region where the person is based.
Investment advice tries to focus on reducing risk to get a decent return for your portfolio. There are many ways to ensure there are less ups and downs in the value of your account. Diversification is a word that we bat about, but what are the ways we can help you reduce your exposure to risks?
1. Possibly putting more cash into investments
2. Keeping large company stocks
3. Not concentrating investments into singular sectors like Banking, Oil, or Food
4. Having investments in multiple countries
When I came to the UK in 2002, the majority of the portfolios were focused on FTSE based shares, which at the time carried large dividends and were very focused on financials and consumer goods. Over time we have made moves, always focused on your individual risks and goals to add in global shares.
Markets in the USA, Japan and even further afield can give us opportunities to gain even when the UK is struggling. Even though we are a strong nation there have been markets that have outperformed us and using external managers like we do at Temple Row helps assist us investigate international investments.
Our external managers provide access to certain investments and information that without them we would never know about. Their meetings with companies of interest help kick the tires for us and provide knowledge on how those international stocks and bonds and savings tools could bring us support in down times or add to the growth in flat times.
Globalisation has resulted in companies that were previously considered UK stalwarts becoming parts of larger worldly companies. This means that when we look at returns from companies there can be boosts when a currency like the dollar is the basis for accounting. In some cases, a dollar that is cheaper than other currencies such as the Pound, Euro and Yen makes the profitability much higher when sales are being made outside North America.
Having a global spread on your portfolio can make a significant difference when localised issues like Brexit or Lockdowns effect stock value.
Some day soon we will be able to travel and buy products in some of the places we have invested in and not just enjoy the benefits of the growth in our portfolios.
If you are interested or would like more information on anything mentioned here, then please be in contact with any member of our Temple Row team.
*** All investments carry some kind of risk. The value of units can fall as well as rise, and you may not get back all of your original investment.***
