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Introduction to asset allocation

Nick Blake, head of Personal Investing, explains why asset allocation is so important for investors.

 

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Welcome to the Vanguard Learning course on asset allocation. 

My name is Nick Blake. I’m head of Personal Investing at Vanguard Europe. 

As you work your way through the course, you’ll learn a great deal about what asset allocation is, how it works, why it’s important to investors. It’s an interesting topic and to be quite frank, much of it is common sense – don’t put all your eggs in one basket, minimise your risk, minimise your costs. 

But the best way to understand asset allocation is to take a step back and think for a minute, what is investment, what are we trying to achieve when we invest? Investment is not speculation – it doesn’t offer a quick return. But it’s not saving either, as investment does mean taking risk. 

Investment involves taking a considered risk to achieve a return based on reasonable expectations. Investment works best when it is done with purpose, in other words, when we have a goal. 

A good investment goal has nothing to do with finance, nothing to do with money. It’s something we want to achieve in life – buying a home, providing educational opportunity for our children or grandchildren, enjoying the fruits of our working life through a long and comfortable retirement. 

When we have a goal, when we have defined what it is we want, that’s when the tools of investment, such as asset allocation, spring to life and start to make sense. Because that’s what they’re there for, that’s what it’s really about, helping us and our families to live a little better. 

I hope you enjoy the course, and I hope it helps you to achieve your goals. 

Thank you. 

Investment risk information:

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested. Past performance is not a reliable indicator of future results.

Other important information:

This video was produced by Vanguard Asset Management, Ltd. It is for educational purposes only and is not a recommendation or solicitation to buy or sell investments.

If this is to be used on third party websites for an audience of professional investors as the submission suggests I would also include the for professional investors disclaimer at the top.

Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority.

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