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Idea of the Week: 4 Reasons to Rebalance Before 2012! [2 Dec 2011] December 2, 2011
With 2012 on the horizon, we explain why it makes perfect investment sense to rebalance your portfolio before the year concludes.
Author : Fundsupermart


Untitled Document

Reason 1: Equities have underperformed fixed income in 2011

Global financial markets are almost done with what has been a turbulent year in 2011. With events such as the Japan Earthquake in March, US debt rating downgrade in August and the heightened drama in Europe, many investors had decided to exit equity markets and channel their funds into the relatively safer fixed income asset class. Global Equity markets as characterised by the MSCI AC World Index have lost -6.8% while fixed income as measured by the JP Morgan Global Aggregate Bond Index has gained 5.2% on a year-to-date basis as of 1 December 2011.

The outperformance of fixed income in comparison to equities for 2011 has left the portfolio weights of investors lopsided with a bias towards fixed income. With an unbalanced portfolio, an unintended over-exposure to certain asset classes, regions or sectors can have a detrimental impact on one’s returns. Rebalancing can help to avoid some of these problems, so do it! We've even come up with 6 useful tips on how to rebalance your portfolio, so there should be no excuses!

 

Reason 2: Select the Best Investment Opportunities for Your Portfolio

The old adage that the only constant is change has held true for markets this year. Old opportunities have been taken advantaged of with new ones on the horizon. Take a look at our Key Investment Themes and 2012 Outlook, where we seek to present to investors our best ideas for the year ahead.

 

Reason 3: ‘Tis the Season to be giving.. FREE Rebalancing (in December 2011)

Financial markets have not been kind to investors this year and we know it, BUT, tis the season to be giving and in seeking to fulfil our mission statement of helping investors invest globally and profitably, Fundsupermart is WAIVING SWITCHING FEES for the month of December. As rebalancing is a crucial exercise for the portfolios of our investors, we wish to encourage our account holders to embark on their rebalancing process. So please TAKE ADVANTAGE OF OUR FREE SWITCHES to save on transaction costs and enhance your portfolio today!

 

Reason 4: New regulatory requirements kick in next year

As part of the regulatory requirements, Customer Knowledge Assessment (CKA) criteria has been set by the MAS to safeguard the interests of investors. Stringent criteria for passing the CKA range from 3 years of work experience in investment-related industries to educational qualification needing to be fulfilled before one can transact independently and unimpeded. Investors who fail the assessment are required by the MAS to be given investment advice, without which, no form of buying, switching or Regular Savings Plan (RSP) application can be transacted. With such implications, investors might be left feeling incapacitated as not all of us have the necessary experience or qualifications.

Fret not! An easily filled criterion for our account holders to empower themselves is the requirement to have conducted at least 6 transactions in unit trusts over the last 3 years. With our FREE switches in December, the time now is as good as ever to pass this assessment and qualify yourself to conduct your trades just as you have always done.

 

Related Articles:

6 useful tips on how to rebalance your portfolio
Key Investment Themes and 2012 Outlook
Free switching, limited time only!
SEMINAR: What And Where To Invest 2012
New measures from MAS: Customer Knowledge Assessment (CKA)


iFAST and/or its licensed financial adviser representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund's prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer in the website. If you have any queries about the above contents, please contact iFAST.