A study by JPMorgan investment bank, has found that only one in five of the wealthiest around the world are able to maintain their wealth over two decades. Many family fortunes, as in Brazil, do not survive beyond the third generation. Often this is due to the offspring going on excessive spending sprees. In other countries heavy government death duties compound the problem.

Diversifying asset allocation is indicated as the key approach to staying wealthy, but it is the method most difficult to adhere to, as it can often be an emotionally difficult thing to do. Asset allocation is all about the percentage of the portfolio invested in cash, property, stocks/equities and bonds. Then ensuring that these are diversified both onshore and offshore. An analysis will review whether you are overweight, underweight or on-target in any area. The mixture of these different assets determines the level of risk associated with the portfolio as a whole, together with the investment returns that could be expected over time. So if the value of the currency suddenly falls, but you still have investments offshore your portfolio will be cushioned from any short-term fall. How should you determine the proportion of your wealth in each asset class? First consider carefully your needs for the future, whether capital growth, income, or a balance between the two are important to you. Next determine your perceived dependence on currency fluctuation to protect your wealth and long term financial goals. Finally, the time-scale for investment and the level of risk you are prepared to accept in achieving your objectives. If circumstances remain the same year on year you should still review, due to changes in the value of the individual components. Fixed interest in Banks offer steady income for cash, but are susceptable to currency fluctuations and inflation. Property can also offer steady income, but in Brazil  poor to no capital growth is more the norm, high maintanence and generally highly illiquidity are also a common problem with property investment. Equities, funds and bonds offer potentially the greatest return. If these are in hard currencies then they also offer considerable stability for the future. They can offer good diversification if in collective funds and are easily bought and sold.

It is vital to review your overall investment portfolio at least once per year to appreciate the changes in investment weightings and the impact of changes in personal circumstances. It can be extremely helpful to speak with an adviser to make sure you have all the relevant information, and also give you an objective viewpoint. It is often very difficult to look at your own financial circumstances clearly. We are pleased to offer this service at no charge.