No one knows what the top-performing asset class will be next year. Lacking this prescience, your next-best solution is to own all of the classes and rebalance regularly.
Sentiment: NEGATIVE
I think that the first thing is you should have a strategic asset allocation mix that assumes that you don't know what the future is going to hold.
Owning a variety of asset classes means that some part of your portfolio will be doing well when the cyclical turmoil arises. A broadly diversified portfolio includes large capitalization stocks, small cap, emerging markets, fixed income, real estate and commodities.
I have spent my career making a difference with underperforming assets.
What are we focused on? Return on equity. We don't need these great big tier one assets. I'm very happy with getting tier two, tier three assets; that's what Glencore has been good at.
There are two main drivers of asset class returns - inflation and growth.
When popularity is your only goal, doing well in class is going to feature very low, if at all, on your priority list.
The assets you want to buy are the ones people have to sell.
One of the great responsibilities that I have is to manage my assets wisely, so that they create value.
You'll get the biggest bang for each buck by paying off the highest interest rate debt in your portfolio first, while making minimum payments on the remainder. It's called the avalanche method, and it gets you out of debt cheapest and fastest.
If the investor doesn't have enough time and skill to investigate individual stocks or enough money to diversify a portfolio, the right thing to do is to invest in exchange-traded funds that give you exposure to asset classes. It does make sense for the individual investor to think in terms of holding individual asset classes.