Expert extols importance of investment diversity

An expert in investments has noted that diversity is vital if people are to navigate the markets at present. Writing on, Rob Kyprianou, former chief investment officer of AXA Framlington, pointed out that last year was unpredictable, meaning anyone who did not adopt such an approach may have been exposed to too much risk.

In the article, he noted how well his own investments had done. He stated: “Overall a neutral year despite some large risks taken against my benchmark – demonstrating again that old investment wisdom that if you are going to take risk then at least have a diversified portfolio. 2011 was the kind of year in which you could have been carried out with large concentrated risks.”

Meanwhile, in particular reference to his own wealth management strategy, he revealed that exposure to emerging market equities and financial funds took a toll on his Sipp, but his “bearish take on the eurozone served him well”.

He also noted that the FTSE 100 was around five per cent off for the year, while the sterling/dollar exchange rate ended roughly where it started.

According to Mr Kyprianou, those who engaged in wealth management last year, including those who made use of SIPPs and so on, saw a story of “volatility, dislocation, rerating and records.”

He added that for investors, 2011 was a year of “huge opportunity and massive risk”. He predicted that when the investment performances for the year are recorded, they will reveal an “extreme range”.

Thankfully, those who lack the necessary knowledge and experience to make the best judgements when it comes to SIPPs and other such products can get expert help from specialist firms. This can make their lives easier and help to optimise their results. Such assistance may be particularly in demand at present because of the tough market conditions.

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