In an increasingly connected world, investors are constantly bombarded by conflicting financial information and analysis. As a result, many investors frequently react to short-term market noise and attempt to time investments rather than focusing on their long term goals.

Equally concerning, a number of significant negative events over the last few years have caused many investors to panic and retreat to the perceived relative safety of cash. In Australia, households still have a record $700 billion sitting in term deposits, this is despite deposit rates steadily declining to near zero after we adjust for the cost of inflation.

Recent analysis of portfolio returns have concluded that Elston has added enormous value to their clients during this turbulent and uncertain period. A $1,000,000 invested in an average Elston “balanced” portfolio* since inception (November 2008) would be worth roughly $1,990,000** today (as at 31st January 2015). Over this time frame investors have had to navigate some serious financial shocks including the:

  • Lehman Brothers collapse & global financial crises (GFC);
  • US credit downgrade & European debt crises (which still lingers);
  • and closer to home, Australia’s mining boom (now bust).

This consistent long term return outcome has been achieved whilst being invested across a broad range of conservative cash, fixed income, equity and property investments; proving that the best defence against unexpected market volatility is to be diversified across different assets.

Elston clients have benefited from having a professional & disciplined investment process, strategic wealth management advice, education and practical support to ensure they stay committed to their long-term goals, successfully.

We can draw some clear conclusions from this analysis. Firstly, make sure you speak to your financial adviser about the return maximising and risk reducing benefits of portfolio diversification. Secondly, always seek professional advice to help articulate your objectives and develop a strategic plan to achieve these personal goals. Finally and possibly most importantly, ensure you stick to your long term plan, preferably guided by a qualified investment manager with a proven track record.

* based on a composite valued weighted average of all portfolios on the Elston “balanced” asset allocation.

** performance is before fees and taxes including the benefit of franking credits. Past performance is not an indicator of future performance and individual portfolio returns will vary from the composite average.