Asset allocation: The linchpin of intelligent portfolio management
The bursting of two financial bubbles in succession, the dotcom one in 2000 and the subprime one in 2008, came as a painful reminder that all investments, whether in equities, fixed income or property, entail risk. Does that mean we should refuse to invest and keep our savings in a current account instead? If we did, the risk would be non-existent but so would the return. Between the cold feet of cash and the thrills and spills of speculation, is there a middle road? To answer this question objectively, we examined in minute detail how the main assets have performed over several decades. Paradoxically, analysing the past is the best way to prepare for the future. As Winston Churchill said, « While history does not repeat itself exactly, it casts a long shadow».
The dynamics of financial markets depend on the economic outlook and on how it is interpreted by investors. These two parameters are unpredictable near term, but in the long run they follow recurring cycles. In many respects the subprime implosion bore an uncanny resemblance to the 1929 Crash.
Our study yielded the following conclusions:
- The long view is the only relevant one.
- Asset performance is closely linked to inflation (or its opposite, deflation) and to the stability of the countries concerned. Thus, thorough economic analysis is needed to identify these parameters accurately.
- The globalisation of markets is leading to their convergence, particularly in times of crisis. Geographical allocation has become less significant than in the past.
- Risk, in order to be really controlled, has to be spread across a number of asset classes. Correlations between individual positions have to be analysed methodically to prevent a mere dispersion of the portfolio's overall value. Asset allocation moreover needs to be constantly updated to provide an optimal combination of the various investments.
Our Strategy Committee meets regularly to match these findings to current developments. Demanding objectives are set, especially for risk management. Assets can rarely be made to grow by speculating. What works is avoiding losses.
These are the basic tenets of our asset allocation strategy. In combination with the talent of your account manager, who understands your personal needs, they ensure intelligent long-term management of your wealth.
Objectifs du Comité de stratégie
Objectifs du Comité de stratégie
- Sur le long terme, la performance des portefeuilles doit dépasser nettement celle de l’inflation. A titre d’exemple, le renchérissement (de base) moyen aux Etats-Unis a été de 4,6% sur les 35 dernières années. Un dossier en base dollars, correctement diversifié et géré avec discernement devrait avoir produit un rendement moyen de 10% environ, avec une volatilité de 9%.
- Les récessions économiques et les crises boursières sont une fatalité ; leurs effets dévastateurs doivent être limités au maximum. Dans ces périodes troublées, la valeur des actifs diminue inévitablement. Toutefois, la structure diversifiée du patrimoine permet de contenir dans la plupart des cas la moins-value au-dessous de la barrière des 10% sur 12 mois.
- Le portefeuille doit être constitué dans l’optique d’un horizon temporel de 24 mois au minimum. Dans cet intervalle un dossier bien équilibré ne devrait, en principe, pas perdre d’argent, qu’elles que soient les conditions de marché.
- Les grilles d’allocation tactiques sont ajustées en temps réel aux opportunités des marchés financiers et systématiquement évaluées par rapport à un dossier équilibré de référence.
|