Nailing your asset allocation

The Rules of Investing

Livewire Markets

While most investors focus on picking stocks to drive performance, in reality, this is just a part of it. Research has proven that over the long-term, 85% of your return is determined by nailing your asset allocation, i.e.: the right mix of equities, bonds, alternatives, property and cash for your goals. 

In the final part of this three-part mini-series aimed at new investors, I sit down with Andrew McAuley the Chief Investment Officer for Credit Suisse Private Bank in Australia. Bringing it all together to complete this series, Andrew succinctly explains what asset allocation is and why it is important to get right. 

This was an enjoyable interview with an industry luminary, and I hope you find it as useful as I did interesting.

Timestamps

  • 1:50 – What are asset allocation and portfolio construction? And why are they important?
  • 5:13 – Why deciding what assets to invest in is more important than picking stocks
  • 6:45 – Breaking down asset classes – Bonds, Equities and Alternatives
  • 9:54 – Why hold bonds?
  • 15:04 – What asset allocation might look like for a 25 year-old?
  • 17:18 – Similar profiles, different risk profiles
  • 20:23 – When to use Active and Passive management
  • 26:15 – Most common investing misconceptions
  • 29:19 – Franking credits and investing home bias
  • 30:50 – Biggest risks in markets today
  • 33:10 – Andrew’s favourite rule of thumb for investing
  • 35:22 – Favourite questions

Previous

In part one of this three-part mini-series, I spoke with Phil Richards, Director and Wealth Advisor at Endorphin Wealth to discuss setting yourself up to get started as an investor

In part two, I sat down with Hamish Carlisle from Merlon Capital to discuss 'How to pick stocks like a pro'. 

More podcasts

If you're enjoying The Rules of Investing and don't want to miss a future episode, subscribe now to get notified when a new episode is released.

Or stay up to date with my content by hitting the 'follow' button below and you'll be notified every time I post a wire. Not already a Livewire member? Sign up today to get free access to investment ideas and strategies from Australia's leading investors.


1 contributor mentioned

The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.