Introduction

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.

Introduction

Concentration risk. No, it’s nothing to do with thinking too hard about something. In fact, it’s more likely to be a result of not paying enough attention.

Concentration risk is the increase in investment risk that comes about from not sufficiently diversifying your portfolio. In other words, too much money is concentrated in too few assets, sectors or geographical markets.

This can happen:

• Intentionally
• Unintentionally
• Accidentally

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.

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?

Introduction

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...