Also for the month of November, the Advise Only team is offering its users Asset allocation free of charge: a very useful financial service for savers and investors.
Asset allocation is a monthly document drawn up by the officeFinancial Strategies Group”, which offers the monthly opinion of our experts on the financial markets in a concise and simple way.
This document is even more useful if you have chosen (always free of charge) one of the investment ideas that we offer in the Express Portfolio section of the site (just log in or register on the site). By copying a portfolio among the 9 proposed, you can over time make the changes you deem most appropriate or follow the suggestions of the Asset allocation. The objective of the document is, in fact, to adjust the 9 portfolios to the climate of the financial markets.
Easier said than done: save your favorite portfolio among the following 9 and then take a look at the document (click the “download“ button) found under the table.
The view of Advise Only
In the last month, the Advise Only Global Risk Barometer (you can consult it for free by accessing the site) has reached 62 (above 50 the financial risk is normal), reaching an all-time high since 2000.
As regards the economic situation, the United States is at the beginning of a process of stabilizing the economy which will require a careful and gradual rethinking of the expansionary monetary policy adopted by the Fed. The Eurozone is emerging from a long economic depression, even if this happens "in leopard patches" among the countries of the Union: it is too early to think that we have come out of the tunnel of the crisis. In the short term, the euro area has to face the crux of the banking system: the review of bank balance sheets will be able to reopen wounds plugged in by the intervention of the ECB. In China, the Government is in the process of outlining economic policy objectives for the next 5 years.
Over the past month, investors have continued to favor riskier asset classes (equities) and peripheral eurozone countries. Considering that, compared to a month ago, there have been no serious steps forward from a structural point of view, it is possible that the market is underestimating part of the latent risks in the euro area, despite the fact that the economic and financial situation has improved compared to 'beginning of the year. For this reason, our investment strategy remains prudent and well diversified.
Basic scenario
Beyond the monetary policy choices, we are approaching a phase of gradual reduction of liquidity which will weigh above all on the bond market. The combination of a low pace of economic growth, normal systemic risk and good valuations therefore favors investment in shares. However, it is clear that, out of prudence and common sense, a person's savings cannot be totally directed to equity: therefore, in our opinion, a fixed income/monetary component must always be present.
Summary of asset allocation
Portfolios remain well balanced and with a good dose of cash in less risky portfolios with a short time horizon. The main investment themes are: short-term bonds (3-5 years), European equities and Japanese equities.
