Retirement Portfolio Resilience Perspective
Primary Pillar: Retirement Portfolio Construction
Supporting Pillars: Risk Pricing Discipline • Resilience Across Market Environments
This early edition of Gyrations explores the evolution of investment risk management and introduces the concept of expanding the portfolio construction toolkit available to conservative investors.
Viewed through today's Retirement Portfolio Resilience Framework, the enduring principle is that retirement portfolio construction should not be limited to traditional growth and defensive asset allocation alone. Instead, investors can benefit from complementary portfolio construction approaches that combine long-term growth assets with resilient protection strategies designed to reduce dependence on favourable market conditions. While the terminology reflects the investment environment of the time, the publication represents an early expression of the philosophy that ultimately evolved into Retirement Portfolio Resilience.
This publication forms part of Gyrostat's historical research archive documenting the evolution of the Retirement Portfolio Resilience Framework.
There have been significant advances in investment risk management for conservative investors enabling them to protect and grow capital with reliable income through the complete investment cycle.
- “Level 1” was diversifying risk- varying the allocation of ‘conservative and ‘growth’ assets.
- “Level 2” protection sometimes in place using a predictive risk management overlay. This introduced an additional ‘growth’ asset.
- “Level 3”, the Gyrostat approach, with protection always in place. This produces an additional ‘conservative’ asset.
Each level reduces in the downside variability of your investment capital with complementary return characteristics.
By combining the three approaches and adjusting asset allocation now, it is possible to protect and grow capital with reliable income through the complete investment cycle.
The gap in today’s market is the ability to benefit from volatile markets with capital growth (including large ‘one off’ share price falls). This investment risk management approach is now available on the expanded investment menu.
Our feature article in Gyrations shows the significant progress – possible from technological advances and deregulation.
The Gyrations risk model considers the implications of geopolitical, macro-economic and company valuations on investment risk. Increased volatility is often experienced around key data releases relating to interest rates, growth, inflation rates and key political events.
Our report details the investment landscape (in pictures) with dates of key upcoming data releases.
