If your hockey team was tied 1-1 in the last 60 seconds of the game, would you pull the goalie or play it safe and protect the net?
How you answer that question may indicate how you'd approach your investments – whether you're a conservative investor or a bit of a risk taker. This kind of knowledge about yourself is a great start to understanding asset allocation and diversification, two concepts every investor should be familiar with.
Finding it difficult to pick investments?
Selecting the right portfolio doesn't have to be riddled with stressful second thoughts. The first thing you need to do isn't even about choosing from the thousands of investment products available today – it is about you. With your advisor, you need to answer important questions.
- What is your tolerance for risk?
- What is your investment time horizon?
- What potential returns are you looking for?
The key is finding your own personal sweet spot between risk and reward. When this is done, asset allocation solutions can help. Together with your advisor, you can choose and invest in a professionally managed solution that divides your investment among different asset categories, such as stocks (which are generally riskier but also have greater return potential), bonds (which are generally more conservative and have less return potential), and cash. How a portfolio is selected depends largely on how many years you will be investing, your ability to tolerate risk, and your dreams and goals.
Is diversification important?
Simply put - yes. A broadly diversified portfolio allows you to take advantage of market opportunities while helping mitigate risk.
Like many things in life, diversification comes in many shapes and sizes. Diversification can be as narrow as spreading your investments across a few asset classes. Or it can be as broad as investing in several geographic regions, across different industries and choosing multiple managers who may excel using different investment styles.
Relax. Keeping your investments on track isn't YOUR job alone.
In a global economy, there are influences on your investments from all corners of the world. Tracking and monitoring your portfolio regardless of the upswings and downturns of each local market, is a big job that an expert portfolio management team can help with.
At Sun Life Global Investments, we have our finger on the pulse of global trends and market conditions to bring you investment ideas from around the world. The Sun Life Granite Managed Solutions is just one example. Crafted to help make investing easy, our series of 5 portfolios brings you a complete, world-class investment solution.
Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any mutual funds managed by SLGI Asset Management Inc. These views are subject to change and are not to be considered as investment advice nor should they be considered a recommendation to buy or sell.