According to forecasts, by the end of the year 35% of their assets will be in shares
The rich Europeans will continue to rely on shares in their portfolio and by the end of the year 35% of their assets will be invested in shares, an analysis of Cap Gemini and Merrill Lynch survey database on personal finance distribution conducted by Pioneer Investments, showed. For the sake of comparison, at the end of 2010 the average percentage of the shares in the financial assets of the rich Europeans was 28%.
Pioneer Investments’ analysts expect an increse of investments in bonds from 30% in 2010 to 31% in 2011. The rich will reduce the share of their assests in real estate with one percentage point down to 14% this year.
Pioneer Investments’ analyses show a considerable difference in the allocation of the savings in Bulgaria and Europe. At the end of 2010 around 90% of Bulgaria’s idle funds were in banks in the form of deposits, and the remaining 10% of their assets were divided between the pension funds, shares and the other types of financial instruments.
For the sake of comparison the calculations of Pioneer Investments show that in Europe people hold less than 30% of their money in deposits. Around 35% of the deposits are in pension and insurance funds, and the remaining portion of the savings were directed to the capital markets.
“Portfolio diversification is the best solution for everybody, because this way of investing and saving has proven its reliability in time”, Peter Simchak, Member of the Management Board of Pioneer Asset Management, said. According to Yavor Achev, manager for Bulgaria of Pioneer Investments, one of the best ways to difersify the portolfio and reduce risk are the investments in mutul funds.
“Collective investment schemes are characterised by professional management, access to first class securities with small funds as well as the possibility for better yield than bank deposits in the long-run”, Yavor Achev explained.
Investment advice:
- The easiest solution is the crystal ball. If there is no such, diversification is the next best thing.
- Real estate are a special class of assets. The richer you are, the smaller part in your portfolio do they occupy. They can be both stable and risk-generating!
- You don’t have to be the richest man on the planet in order to have a high quality portfolio.
- The risk can be increased or decreased but it cannot be avoided. There is always a risk. You can believe that there is no risk but this is the only thing you can do.
- Every diversified portfolio can sometimes drop down, but only the high quality portfoliio will recover.
