Here’s how you can allocate your investment portfolio in the current market

Investment has always been a subjective topic, since it is dependent on a plethora of internal and external factors – constantly subject to change. However, one aspect that most wealth managers always align on – regardless of the situation – is that investors must diversify their assets.

Diversification across different asset classes and geographies has never been easier, thanks to the various investment platforms that have mushroomed across the region and globally. This not only cushions the fall from a sudden drop in the value of one asset or the onset of a pandemic, but also ensures that you have sufficient liquidity to bank upon in case of need.

“It is of paramount importance that any portfolio in today’s market conditions should be spread across multiple asset classes,” explains Dubai-based firm AIX Investment Group.

“While doing that, maintaining liquidity for a part of one’s portfolio is equally important. We recommend allocating a part of your portfolio into a safe fixed income product which secures a part of your portfolio with regular cash flows, while maintaining a more liquid portion working capital, which a client can always reach out to on a rainy day.”

AIX Investment Group recommends that seasoned investors follow a 40-40-20 approach:

• 40 per cent of the portfolio is allocated in a fixed income product, generating steady cash flow with almost no risk involved.

• 40 per cent is distributed in a variable income product, that is completely liquid with a medium risk involved, accelerating the growth of the fund at a higher pace than the fixed income allocation.

• 20 per cent is allocated to a high-risk product, with a calculated risk approach, which makes up for the slower and steadier returns in the fixed income product.

“While return on investment remains a key driver of all investment decisions, we have noticed a dramatic shift in focus away from yields and more towards the safety and sustainability of revenue streams,” states Fadi Dabbagh, board advisor at AIX Investment Group.

“As such, it is only natural for investment sentiment to have shifted towards the more risk-averse side, and our investors are counting on us to advise and counsel them through these changes.”

AIX Investment Group, which was set up in Europe 13 years ago, has generated passive income for its clients ranging from 14 per cent to 40 per cent per annum. Click here to find out more.