What Interior Design Taught Me About Asset Allocation
I took my house from zero to hero over the last couple of years, so I know a thing or two about interior design.
You wouldn’t decorate your home by dumping all your furniture in the living room and calling it a day - at least I didn’t. So why do some people build their investment portfolios that way?
Welcome to the world of asset allocation — the financial equivalent of good interior design. It’s not just about what you own, but how you put it all together, to make it work for you. Let's break it down, room by room.
🛋️ The Sofa: Your Core Holdings
Every good living room needs a sofa. Big, dependable, cream, in my case. It’s the piece that everything else is built around — just like the core of your investment portfolio.
Think low-cost, globally diversified multi-asset funds. Not flashy, but strong. These are the holdings that do the heavy lifting and bring structure to your portfolio. The rest is just… accessories.
The Mirror: Reflecting Your Risk Tolerance
No two living rooms are the same — and neither are portfolios. Some people go for clean lines and minimalism; others want maximalist colour explosions and wild patterns.
Your investment style should reflect you. Are you cool with risk and volatility? Great — you might throw in more equities or even an EIS. More cautious? You’ll lean toward a lower equity content, maybe bonds or income-focused funds. Either way, the design is deliberate and when you look in that lovely leaner mirror, your risk tolerance and capacity for loss should be staring right back at you in harmony.
🖼 The Wall Art: Higher-Risk Assets
Art can elevate a room — or ruin it. Same with high-risk investments. They’re not bad, but they need context. Just because you saw someone on TikTok buy crypto and make £10k doesn’t mean it belongs in your financial hallway.
If you’re dabbling in early-stage investments, single stocks, or the odd private equity deal, make sure they don’t overpower the room. Statement pieces are great — unless they clash with everything else.
🧹Decluttering: Rebalancing
Good design evolves. You change the cushions. You repaint the walls. You remove that weird sculpture you bought during lockdown (I nearly bought a life-size ‘David’s Bust’… c’mon Kat, really!?).
Your portfolio should get the same treatment. Rebalancing isn't just admin — it's active curation. Things shift, markets wobble, goals change. You don’t let your living room gather dust, so don’t let your portfolio do it either.
🧠 Final Thought
You don’t need a perfectly polished, Pinterest-worthy portfolio — but you do need one that’s coherent, balanced, and makes financial sense for your life and goals. Asset allocation isn’t about making your investments look pretty. It’s about making them work.
So next time you’re tempted to chuck in a flashy new fund or jump on an investment trend, ask yourself — would I put that on my living room wall? If the answer’s no, maybe it doesn’t belong in your portfolio either.
p.s not advice obvs!
This article would be correct as at the time of writing but as our lovely Government kindly reminds us; rules and regulations can change. Seek advice before taking any action.