Asset Allocation - Financial Writers Australia

INVSTR039 How much cash should you hold vs invest? What’s the right mix? (613 words)

ebony@financialwriters.com.au (Ebony Hardy, Financial Writers Australia) — Mon, 12 Jan 2026 00:00:00 +1000

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Wondering whether you have the ideal ratio of cash to other investments in your portfolio. This article will help you to distinguish between emergency cash, cash investments and cash equivalents, as well as discussing cash ratios applicable to different life stages.

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There are always two ways for individuals to hold cash – emergency fund cash and investment cash. This needs to be clarified before discussing any investment mix.

Emergency cash (not part of your investment portfolio)

Life has a habit of delivering the unexpected, so it’s a good idea to keep 3-6 months of living expenses in cash, readily accessible in a savings account or mortgage offset account. Make that 6-9 months if your income is variable and you would like extra peace of mind. Other reasons for setting aside cash might include saving for a particular goal, such as a car purchase, an overseas holiday or a wedding.

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INVSTR037 Waiting in cash until share markets fall (521 words)

ebony@financialwriters.com.au (Ebony Hardy, Financial Writers Australia) — Tue, 05 May 2020 00:00:00 +1000

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This article uses a case study to demonstrate the strategy of holding in cash and waiting for market opportunities (or volatility) before investing. It demonstrates the key benefits as well as consequences and urges clients to seek professional advice from a qualified financial planner.

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As any long-term share market investor knows, markets can go up and they can go down. While most people view a falling market as a bad thing, some investors see it as a buying opportunity. After all, it’s better to pay, say, $60 for a share after a market dip than $100 for the same share at the market peak.

Of course, to be able to exploit these buying opportunities, the cash needs to be available. That means hoarding some extra cash while markets are happy in anticipation of a rainy day. It also means having a strategy around when to invest, how much to invest, how long to hold and what to invest in. There isn’t a single, off the shelf solution to this, but 58-year-old Barry provides an example of what the rainy day investor needs to think about.

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INVSTR035 The benefits of investment diversification (420 word)s)

julianne@financialwriters.com.au (Julianne Pott, Financial Writers Australia) — Thu, 25 Jun 2015 17:10:18 +1000

{tab Description} This article explains the importance of diversifying investments across asset classes and simple ways to achieve investment diversification. {tab Introduction} When it comes to financial management, no single investment will continually outperform all other investments all of the time. To minimise potential losses and to smooth your investment returns over the longer term, you should spread your portfolio across various investments. But that can be easier said than done so there are different ways to diversify.

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INVSTR034 All assets are not the same (429 words)

julianne@financialwriters.com.au (Julianne Pott, Financial Writers Australia) — Thu, 25 Jun 2015 09:06:59 +1000

{tab Description} This article explains the different asset classes. It covers cash, fixed interest, shares, property, and alternative assets. It is a good general education article to help your clients understand asset allocation in their investment portfolio. {tab Introduction}Do you sometimes lie awake at night wondering what effect the latest share market "correction" or property "boom" or “bust” is having on your investments? Understanding the differences between the various investment assets will help you enjoy better sleep patterns knowing that a diversified portfolio can be a good way to manage investment risk.

How diversified are your investments? Or a better question might be: how well do you sleep at night?

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INVSTR033 The power of "average" (477 words)

julianne@financialwriters.com.au (Julianne Pott, Financial Writers Australia) — Thu, 25 Jun 2015 07:45:45 +1000

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This is an interesting article about the need to be prepared for market volatility. It discusses that sound investments recover over time and emphasises the need for diversification. It includes a 10-year investment return table.

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When financial markets experience volatility, many investors obviously worry; but what are the real effects of a “volatile market”?

It is also important to note that different asset classes will outperform in different years. This is illustrated by looking at five major asset classes over the 10 years...

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