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Seven steps to a winning portfolio

A well-spread portfolio covering thousands of assets is just seven simple steps away
Seven steps to a winning portfolio

Putting together the right mix of assets is the most important job we face as investors. Unfortunately, many of us don't treat it this way. Although the principle of "not putting all our eggs in one basket" is widely known, a lot of us end up with portfolios that look more like scrambled eggs. Rather than thinking about how assets might work with each other, we typically just throw today's hottest tips randomly together with yesterday's.

It doesn't have to be this way, though. A wealth of academic research and real-life experience has shown what a successful combination of investments might look like. Putting these ideas into action doesn't call for costly advisers or complex mathematical models, either. In fact, you could very well achieve winning results with nothing more than a humble spreadsheet and a straightforward brokerage account. Meet the seven-asset portfolio.

This simple but effective allocation strategy is the brainchild of Dr Craig Israelsen, finance academic at Utah Valley University, who specialises in analysing mutual funds and designing portfolios. Dr Israelsen showed how a US portfolio made up of seven simple and easy categories that requires only annual maintenance and can produce winning returns over time.

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