Dear
Client
It is now many
years that we have been warning clients not to be over exposed to a single main
asset class. Investors are usually either over exposed to the main asset class
equities or the main asset class fixed property.
Economists
advise that investors should be evenly exposed to 7 main asset classes, but if
alternative assets (Hedge Funds) are part of the mix, exposure to 4 main asset
classes is okay as alternative assets seldom correlate with the other main asset
classes.
Have you heard
of people saying fixed property is a solid asset class? Have you heard people
say, “You cannot go wrong investing in fixed property?” The truth is that there
is no such a thing as a solid asset class and it is dangerous and unwise to over
expose yourself to one single main asset class, as the particular asset class to
which you are over exposed, can be the next main asset class to be hit hard by
the next share market crash and it can wipe you financially out if you need your
assets during the period of the crash, for instance if you are already retired
during that period.
Fixed property
in the first world countries, America, Japan and Europe has been hit hard by the
credit crunch crash of 2008 and some of them are only recently busy making a
comeback, but some not, according to the article with link http://www.bdlive.co.za/world/europe/2014/09/17/spains-house-prices-will-fall-for-another-year
from the Business Day 17 September 2014 “Spain’s house prices ‘will fall for
another year’”
Andre
Delport
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