Many people ask me what I think the future might hold. "What's the market going to do next year?" they'll say.
It’s the wrong question to ask.
And here’s why.
The Morningstar Asset Class Gameboard has just been updated for the 2016/17 financial year. It’s always fascinating to look back over several years and see the winners and losers, and confirm just how tough it is to pick the best asset class in advance.
If you can pick up a predictable pattern from that lot, you are doing better than me.
One observation is that one year’s winner inevitably finds itself at the bottom not long after. And vice versa.
My tip. Throw away your crystal ball and focus on what you can control instead.
Make the starting point you and your own needs, not what someone is trying to sell you. Build a diversified portfolio that suits your own risk appetite and goals. Only take risks that generate an expected return and reduce the risks that do not. Take a long-term view. Pay heed to costs and taxes. And once you’re set, manage your emotions and stay disciplined.
Important - This article and opinion is based on generally available information and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider obtaining financial, tax or accounting advice on whether this information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. See full Terms and Conditions here.