Lunchtime Takeaway: Allocation in risky times

We’re committed to making your practice better, so all this month, we’re delivering you a daily takeaway.

Today’s takeaway is…

Allocation in risky times

When selecting an asset class, portfolio managers now need to cover off the portfolio’s risk by ensuring an even balance between assets that could be sold if there is a need to raise capital, and non-liquid assets that have long-term growth potential.

Even more fundamental is an acknowledgement that managing downside risk is more important than future gains. There is a recognition by pension managers that chasing extra basis points of returns on high growth/higher risk assets should be avoided if the fund already has its future liabilities funded.

Want more? Read: Altering allocation to account for new risks

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.