Portolio Construction of offshore funds

A word on portfolio construction. It is my belief that an investment portfolio is a bit like a house. Specifically, when you build a house you do not put the roof on first, you start with the foundations and the walls and you try to make those as solid as possible before you go on and add luxuries like roofing, doors, windows and plasma TV’s.

In an investment portfolio context then, the foundations are your low volatility, steady-eddie returns products and the roofing would be balanced managed funds and then the windows and doors might be long-only equity funds, perhaps even single country stuff and then the plasma TV and gold-plated bathroom fittings are your direct equity and derivative investments. I think that makes my point without being too specific and boring.

Back to the real world then as in my experience I have found that it is generally only the wealthy amongst us who feel that there is value in wealth preservation techniques such as placing the majority of your investment assets in safer, plodding type investments and only investing in the higher risk areas (if at all) for a very small percentage of the portfolio.

True to say that what actually happens is that investors who perceive themselves as not having sufficient capital will always take the higher risk route because they feel that is the only way to get where they want to be. Fine if you are 25 but a recipe for disaster if you are 40 plus and let’s face it, how many 25 year olds do you know that even consider investing for the future?

For investors building capital by investing in regular savings plans these rules are applied quite differently but I think most of those that have these through me already understand that.

Model Portfolio - these are my personal picks but there will be other funds within the same asset classes also applicable.