I’m 42 and currently employed. I currently have 150K invested in mainly Australian shares. Should my international vs national stock investment distribution change because of the Covid-19 Pandemic? If so, where should I concentrate?
Gavin in Cronulla, NSW
Top answer provided by:
If a pandemic coupled with a market downturn isn’t a great time to rethink a few things, then I’m not sure what is!
Have you completed a risk profile to work out your particular style of investing or done your own research and decided to stick with mainly Australian shares as it’s what you’re most familiar with?
Australia makes up less than 2% of the international market and doesn’t have large, if any exposure to some sectors that have performed well internationally, such as technology, aerospace, artificial intelligence and pharmaceutical for example.
The largest company on the ASX, BHP is worth around $185bn, while US MegaCaps such as Apple can be worth of $2Trn (Jan 2020 values.)
I also don’t know if your $150k is a personal portfolio or your superannuation funds and what the purpose is for the money, or your current asset allocation, so would need a little more information about this, along with your long and short term goals to be able to assist with ‘where should I concentrate?’
Understanding the underlying sectors of where your funds are invested, such as Financials, Industrials, Health, Materials, Real Estate, Communications, Utilities, Energy, Telecom, Consumer Staples or Discretionary can help you drill down to see if you have a good spread of investments, or if you have a more concentrated portfolio.
This may be a good place to start to ensure you’re happy with a more concentrated investment portfolio or if you’d like to diversify by sector and geographically.
Whether to change your strategy because of a pandemic versus whether it’s in your best interest and long term strategy also needs to be weighed. If you felt strongly that markets would partly recover on the basis of a vaccine being discovered, then this may be an example of why it would be worth including pharmaceutical stocks in your portfolio.
I’m sure an adviser who specialises in direct share investments would be able to help assist and ensure you’ve got your options covered.
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