The Asset Mix
For the long term
For long term wealth accumulation various mix products are offered in the market. These products invest in a mix of asset classes such as stocks, various bonds and sometimes listed real estate. The ratio in which investments are made in the various asset classes determines the risk profile. Often referred to as defensive, neutral or offensive. For example, a mix with more stocks than bonds has an offensive risk profile and is therefore much more risky than a defensive profile with more bonds. The selection of investments within an asset class and the way this is done is to a large extent the distinctive power of the asset manager.
Your long term
Nowadays, there is a wide variety of tools and platforms available to create and manage an asset mix portfolio yourself. Based on your risk preferences and profile you choose an asset mix and select investments of your choice. This way you create your own truly customized investment portfolio with your preferences for sustainability, liquidity, themes, regions, countries and sectors. The costs are of course lower if you do it yourself, but it does require a strong long-term investment discipline. The much-praised Warren Buffet once said: a low cost and low complex alternative portfolio for my fund is a mini portfolio of a mix of 90% S&P 500 and 10% Treasury 1-3 year bonds. Although this is a an extremely offensive mix, it is hard to beat in the long rum.
