When you’re young and looking for a way to save money, the best investments are often the ones that are the most obvious, according to one of the world’s leading investors.
Photo: Getty Images A new report from Investec says chickie’s and petes’ are the world leaders in the world of saving.
They have the lowest expected return, the most diversified portfolios and the best overall risk profile.
The report, titled Investec: The Future of Saving, says chickies are outperforming the market and peties are not far behind.
“We believe chickies and petites are the best investment portfolio for investors who want to be able to do the risky stuff but still have some flexibility to make a profit,” Investec’s CEO and chief financial officer, Ian Brown, said.
Mr Brown said that while chickies have seen “quite a bit of improvement in terms of diversification” compared to past years, petes were “still catching up”.
“Chetie and Pete are the only two of the four investment types that has the lowest anticipated return, as well as the most balanced portfolios,” he said.
“So they are the ones for people who want the diversification but also the flexibility.”
Investec surveyed investment professionals across the globe to determine the world ‘best and worst’ investment portfolios.
It found that chickies were the best for investors looking to save on debt, with their low expected returns, low diversification and low risk profile being its biggest selling points.
It also said that petes are the “world’s best investment” with their balanced portfolios, low expected return and the highest risk profile of any investment type.
Mr Gray said that despite the similarities, the investment world has changed dramatically over the past five years.
“Cheshire, which is a chicken and pig, has been on a rollercoaster ride for the last decade,” he told AAP.
“There are lots of chicken investors who think they’re going to be successful and who will get rich, but those investors have had the biggest, most painful change in their investing environment in the last five years.”
Mr Gray also said investors had become more cautious, with some buying assets that they had not considered investing in and others buying assets with “low risk” in them.
“The only thing that I know is that the investment industry has changed over the last few years,” he added.
“Investment is a very risky business, especially in the current climate.”
The report also found that investors who buy investments with high expected returns have been losing money.
“In the past, the market has gone in the opposite direction and it was often the best asset class that you bought,” Mr Gray added.
Investec said that it was too soon to tell what effect the slowdown in equities would have on chickies’ and petés’ returns.
However, Mr Gray noted that chickys’ and pets’ portfolios were among the most risk-managed.
“It’s a riskier investment than other asset classes,” he explained.
“But in terms in risk and returns, the difference is small.
They’re just a little bit better than the market overall.”
Investing in chickies vs petes: Which is the better investment?
Investec used data from Investing Australia to determine which investment types were most and least likely to return a profit in a year.
It was also looking at the investment portfolio performance of each investment, as opposed to the portfolio of each asset class.
“One of the things that we are really good at is picking investment returns that are at or below a specified target,” Mr Brown explained.
In other words, Investec looked at the return on the underlying assets that would result in a profit.
“For example, if we were to say that we wanted to buy an investment that would produce a 10 per cent return, we would pick the investment that is within that target range,” he noted.
Investeco’s data also found a clear gap in the quality of investment portfolios across all asset classes. “
This is something that is something we look at very carefully in terms, for example, of our investment portfolio.”
Investeco’s data also found a clear gap in the quality of investment portfolios across all asset classes.
The study found that, while investors can get good returns from all of the asset classes, they can’t outperform them all.
“What you really want is to be investing in the asset class with the lowest return, so that you’re not getting an upside,” Mr Grey said.
Investing opportunities The report found that while investors could pick out the investment asset class they would most like to buy, they were not necessarily able to get a return.
“If you are looking for an asset class, you really need to think about what you are really interested in,” Mr Browne said.
He also pointed out that there was a clear “sliding scale” in the types of assets that were most likely to generate returns.
“You could be investing with equities that are in a