London (PRWEB UK) 17 August 2014
Asset Diversification has been described as a common sense approach (‘don’t put all your eggs in one basket’), meaning it is one of the most effective investment strategies for private investors. It allows investors to spread assets and reduce their risk profile while generating consistently higher returns than those achievable with individual holdings. In the past, investors who wanted exposure to Modern Portfolio Theory (MPT) were restricted to products that focused on equities and fixed income.
The main theme of the report is that investors should continue to diversify - in the current environment they need to apply it more vigorously while utilizing Liquid Investment Theory (LIT), Liquid's own refinement of MPT. The additional component present in LIT is the focus on tangible alternative assets originating in a safe and stable part of the world, providing a greater degree of security, such as asset secure farmland. The products will deliver a consistently higher level of returns than traditional asset classes to a wide variety of end user markets. LIT allows investors to participate in the constantly rising demand for the company’s commodity-based products. It focuses on the following key variables:
- Asset Class: The combination of quantitative easing (QE) and sluggish growth has distorted the behaviour of global markets for the past five years. Equities are expensive and bonds are unattractive, thus attention is shifting to alternative assets.
- Currency: Does the issuing bank or financial institution have sufficient credibility? Moves that need to be considered include the rising number of debt defaults in China and its attempts to deflate a fast expanding credit bubble.
- Geopolitics: Investors will pay a premium for investments in a stable country or region. Ukraine, Turkey, Argentina and vast swathes of the Middle East are anything but stable. Widening budget deficits, currency weakness and interest rates hikes continue to plague many of these markets and global geopolitical tensions haven't been this high for a generation.
- Market Risk: Will the chosen asset be vulnerable to a correction?
- Products: The greater the range of products supplied by the asset, the greater the diversification.
The key take-away from the report is that investors should continue to diversify - in the current environment they need to apply it more vigorously utilizing Liquid Investment Theory (LIT), Liquid's refinement of MPT.
For the full version, download the "Asset Diversification - Sink or Swim: Surviving the Storm on Private Wealth" report.
For further information:
Jayshree Badhan, Chief Marketing Officer
+44 (0) 20 7084 7421
Note to Editors:
Founded in 2006, Liquid Investments is a British owned and operated business headquartered in Knightsbridge, London, with an additional office in Fortaleza, Brazil. The company provides global investment solutions allowing institutional and private investors to accumulate wealth through safe and secure alternative investments in emerging markets.