We've picked up a haul of four gongs so far in 2013, including three this week as Stephen Wilmot swept the board, Titanic-style, at the prestigious LSL Property Journalism awards. I’m sure you’ll agree that, on the basis of the breadth and analytical depth of his coverage, he richly deserves to be the UK's Property Journalist of the Year.
Despite its popularisation during the noughties housing boom, property isn't about making a quick buck - it's part of the fabric of the nation's economy, and therefore an important asset class for sensible investors to consider. The danger in property investing is that it becomes people's only investment – as it often is in China where, mistrustful of equity markets, people have piled into bricks and mortar and pushed prices sky high. Attempts by the Chinese government to curb property price inflation are only proving partially successful, such that the prospect of a significant and globally-destabilising correction there lingers on.
We're not of the opinion that UK property is set for similar problems - the Chancellor's extra cash for build-to-let schemes announced in this year's Budget reflects the fact that we have too few homes, not too many (you'll find links to the full Budget coverage in Seven Days). That's why we think property remains a worthy inclusion in any well-rounded portfolio. As we wrote in last year's Ideal Portfolio feature - which won CFA UK's 'article of the year' award in January - a balanced portfolio should be around 10 per cent exposed to property, and there are many property-backed shares or retail bonds that generate the reliable income that's in short supply elsewhere.
Equities, though, remain the bedrock of any portfolio - a standard allocation would be around 50 per cent, and the second instalment of the Ideal Portfolio explains how you should structure such a holding. As Dominic Picarda argues in The best way into gold, you may want to put some gold miners in it – after a battering last year gold mining shares look cheap, especially as, with inflation outstripping interest rates as governments attempt to reduce indebtedness, the gold price should soon resume its upward run.
I tend to agree that inflation protection should be on investors' buy list now. CPI may be hovering just below 3 per cent, and Mr Osborne has stuck to the 2 per cent inflation target. Yet I find it hard to believe we'll get back there any time soon if the 12 per cent hike in my latest water bill is anything to go by. Against that backdrop, real assets like property or commodities - and equities for the long haul - look the place to be; the riskiest asset, meanwhile, must surely be cash... even if you don't save in Cyprus.
