2022: Diversify, rotate your investment portfolios — Experts
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By Nkiruka Nnorom

In preparation for the investment climate in the pre-election year (2022), investment experts at Afrinvest Asset Management have advised investors to diversify across different asset classes in order to minimize risk and improve returns.

They also advised investors to rotate their portfolio from long term assets to mid/short dated instruments, saying that long term instruments are more vulnerable during policy normalisation.

In their  “Investment Strategy Outlook for 2022”, they advocated for cautious optimism, stressing the need for investors to be guided by both fundamentals and market sentiment.

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They stated: “In the euphoria of economic recovery, we do not want to be caught off guard. We expect investors to be guided by both fundamental and market sentiment.

“What differentiates a great investor from an informed investor is timing and accuracy. In 2022, we will try to identify and position our portfolio in order to benefit from market movement.

“We highlight that diversification remains a key theme of our 2022 strategy. In a time of economic recovery, we expect investors to diversify across and within assets in order to minimize risks and improve returns.

“Portfolio optimization in 2022 is dependent on high yielding, low risk and short gestation period investment in real estate and other alternatives”

Moreso, they emphasized the need for investors to stay liquid, saying that ‘cash is king’.

They stated: “Cash is the 5th  strategy for 2022, as the market could present pockets of opportunities in the year ahead.

“Liquidity is key overall in 2022. With sufficient liquidity, investors can take advantage of market drawdown/mispriced assets.

“Staying liquid requires play in the money market but this should be minimal so as to guarantee optimal returns in 2022.

“In a period of policy normalization, if you must invest in bonds, one must seek stability ahead of volatility.

“Corporate bonds provide this opportunity as they remain stable during market drawdowns.

“We propose that investors should seek high yielding investment grade corporate bonds in 2022.”

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