In simple terms, a balanced investment portfolio typically combines different asset classes with the goal of attempting to balance return and risk for investors.
Often, a balanced portfolio is divided between asset classes like stocks and bonds, with either a slight tilt or in equal amounts. An example of a slight bias would be 60 per cent stocks to 40 per cent bonds.
However, a balanced portfolio can also contain other asset classes. For instance, a small cash component may be added to the recipe for the purpose of liquidity.
Key points regarding balanced investment strategies
In terms of risk, a balanced investment strategy sits in the middle of the spectrum for risks and rewards. A balanced investment strategy always aims to create a balance between capital growth and capital preservation. A balanced approach is generally used by investors that have a moderate risk tolerance.
However, balanced portfolios can be adjusted to meet individual risk tolerances. For example, conservative investors can lean towards capital preservation strategies, while investors with a more aggressive approach can tilt towards a growth strategy.
Risk-rated portfolios for all your needs
At Hartey Wealth Management, we offer a ten-strong suite of professionally risk-rated portfolios.
If you seek portfolios investing in both actively managed and passive investment funds and a diverse range of asset types to achieve diversity and effectively manage risk, we can deliver.
If you need investment advice in Shropshire and Chester regarding your present portfolio, or wish to create an entirely new investment portfolio, reach out to our team at Hartey Wealth Management today.
