Before describing the Strategies, Portfolio & ETFS, we need to understand what asset allocation really means. Asset allocation is an investment strategy that balances risk and reward.
Accordingly, this portfolio allocation is done by carefully apportioning the assets in a portfolio according to the client’s financial goals, risk tolerance levels, and investment horizons.
How is asset allocation applied?
There are plenty of times in life when it’s best to spread your bets and have back-up plans.The concept of 'not carrying all your eggs in the same basket' is the same as diversifying your portfolio. This process is known as Asset Allocation.
When putting together your WealthFace portfolio, we have plenty of investment choices. Different markets and ETFs behave in different ways – some carry higher levels of risk; others offer greater returns.
We always compose every portfolio with our signature approach of maximizing returns and minimizing risk, and there are plenty of different ways we’re able to achieve that for our clients. That’s where asset allocation comes in.
Here at WealthFace, we use sophisticated questionnaires and our robo-advisor platform to obtain a clear picture of our clients’ goals and risk tolerances.
This information helps us diversify and spread our clients’ funds appropriately, and according to their unique profile.
You will find many suggestions and strategies relating to strategic asset allocation online.
Wealthface provides professional and tailored advice through a team of investment experts and complex algorithms that will enable you to make the right choices every time.
Every investor is different and has their own appetite for risks and returns. That’s why our approach is always tailored to the individual needs of the client, aiming to maximize returns according to each one’s risk tolerance.
How does Asset Allocation deal with risk?
Asset allocation will help you to control the risk, or how much of your money is in equities (like stocks) versus how much is in fixed income securities (like bonds) or in commodities (like Gold).
Stocks have historically generated greater returns over the long term than bonds, but they have also experienced higher fluctuations means they are riskier.
Bonds provide steady income or return, a steady although lower than the return on the stocks.
Commodities like Gold is an investment that hedge against inflation and market fluctuations which means protect your investments when the stock market experienced higher fluctuations.
Wealthface offers a selection of portfolios with different asset allocations to help you manage your risk. There are three main categories for asset allocation: Conservative, Balanced, Growth. Learn more about how you can build a profitable customized portfolio.
| Conservative | 0% - 40% | 60% - 100% | Low |
| Balanced | 50% | 50% | Medium |
| Growth | 60 - 100% | 10 - 40% | High |
| Portfolio | Percentage held in equities | Percentage held in fixed income | Risk level |
What is Risk?
Risk is all about your willingness to accept larger short-term losses to maximize long-term growth.
If you are willing to take more risk and the market rises, then you will have great return on your investments.
If you are willing to take more risk and the market falls, then you will have a greater loss in your investments.
What are the Advantages of Diversification?
You minimize your risk when you diversify your investments, hence the saying, “Don’t put all your eggs in one basket.” The same goes for investing. Consider this example: your friend urges you to invest in the stock of a new company.
The new company might perform exceptionally well, but it might also tank, causing you a great loss. If the funds invested were meant to pay for your children’s college education, then this would be a huge loss and a big mistake.
It is why spreading your asset across different investments helps to ensure that you’ve invested in different schemes to be able to ride the wave of positive trends, and weather the storm should a loss occur.
To make the most of your asset allocations, you must continuously adjust and monitor your allocations as they – and you – grow and evolve over time.
For example, young investors generally have a higher risk tolerance as they look to maximize returns that can make a real difference.
On the other hand, older investors might be more interested in a steady income and stable investments for retirement.
You might wonder about your budget, age, and asset allocation. However, no matter your age or background, WealthFace has a portfolio that will match your personality and needs. Find your perfect fit with our state-of-the-art service and see where your money will take you.
Factors to Bear In Mind
Putting together a well-diversified factor based portfolio on your own can be tricky, requiring plenty of skill and foresight. Going it alone can be risky, as a bad investment could lead you to lose your savings and result in you deeply regretting your decision.
Our team of professional experts can serve you, keep an eye on your investment, and ensure your wealth is maintained and optimized while freeing you to focus on things that fill your days with joy.
Wealthface can offer you an ideal portfolio with an efficient asset allocation for your goals with a click of a button. With cutting edge technology at your fingertips, and proven portfolios back-tested for over ten years, why would you invest any other way?
