Invest & Protect

Someone once said you have to speculate to accumulate, but when it comes to personal wealth the first priority of many investors is preservation.

Conventional portfolio management tools can help through diversification and asset allocation models. But for many investors the first and last question is “how much of my capital is at risk?” Even for those with the most diversified portfolio comprising gilts, unprotected equities, property and cash, the short answer would have to be ‘most of it’.

Few would argue the case for a long-term cash-based portfolio so it might be that investors’ need for a combination of security and growth is not optimised by conventional long-only portfolios.

The solution may lie in creating portfolios with greater use of protected investments – either offering full or partial capital protection coupled with defined growth or geared exposure. After all, equity-based upside combined with downside protection would seem to meet most investors’ need for preservation and accumulation.