Many investors have financial goals. These presume certain returns over defined time frames. To achieve this, most Australian investors rely heavily on the local stock market. This may prove lucrative if you get your stock selection and timing right. As we have seen in recent years, however, equity returns can be highly volatile. At best, this can cause investor anxiety and at worst, it can mean financial goals are not met. If it is the latter, then important decisions, such as those relating to retirement, may need to be revisited. The good news is these risks can be reduced without necessarily giving up return expectations. An investment portfolio with asset classes, such as bonds and international equity, may deliver similar long term returns when compared to purely Australian equities - but with a sharp reduction in price risk. Read more (VIEW LINK)
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