You have set your investment goals – 5 FAQs on long-term investing: starting out and you are taking cues from elite athlete training when investing for the long term; we believe you are almost halfway on your journey towards long-term investing1.
Adopting a long-term investing strategy could be likened to traveling on a long-distance journey. Having a mix of transportation modes, including flight, train and road could be an optimal way to reach your destination. Similarly, a well-diversified portfolio can help you manage risk as you seek consistent return opportunities.
1. The roles of different asset classes in a portfolio
Instead of directly investing in a particular stock or bond, investors could consider accessing a diversified range of investment opportunities across asset classes, markets, regions and sectors to help navigate different market conditions.
Asset classes in a portfolio1
| Equities |
Fixed income |
Multi-asset |
- Long-term structural trends are bolstering growth opportunities in various industries including technology, healthcare and consumer.
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- Fixed income comprises a spectrum of income sources. In addition to traditional government and investment-grade corporate bonds, there are also opportunities from non-traditional fixed income sectors such as high-yield bonds and securitised assets.
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- A diversified strategy could include traditional assets such as equities and bonds, and non-traditional assets like securitised debt.
- The key is to include assets which have low or even negative correlations.
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As illustrated in the chart2, over the past 16 years, a well-diversified portfolio of stocks and bonds returned an average of 4.4% per year with lower annualised volatility than a pure equity portfolio. Read more: 5 FAQs on long-term investing: staying invested

2. Source: Bloomberg Finance L.P., FactSet, MSCI, J.P. Morgan Asset Management. Global equities represented by MSCI AC World Index; global bonds represented by Bloomberg Barclays Aggregate Global Bond Index; 50/50 equity & bond mix represented by a 50% equity (MSCI AC World Index) and 50% bond (Bloomberg Barclays Aggregate Global Bond Index) portfolio. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Indices do not include fees or operating expenses and are not available for actual investment. Past performance is not a reliable indicator of current and future results. Data reflect most recently available as of 30.09.2022.
Based on your investment objectives and risk appetite, how can you start diversifying your investment portfolio?