If investing were easy, everyone would be rich.

Simply put, if investing was easy, most investors would be rich! That this is not so can be ascribed to the presence of two powerful forces, “universal truths”, which are constantly at odds, says Glenn Silverman, global chief executive officer at Investment Solutions.

'These are aptly summed up in the conflicting phrases 'the trend is your friend' ie momentum persists, and 'the only constant is change'. With the first phrase, last year’s winner continues to win. With the second, it is more likely to become next year’s loser. The conundrum is that both phrases are true, but the timing is not only uncertain, but critical. This means a country, currency, asset class, market sector or individual share can be a winner -- often for a lengthy time -- until, with no warning, it isn’t. Then there is often an equally lengthy period of underperformance as a losing trend is then set in motion,' he explains.

So what stays the same and what constantly changes? The constants; what doesn’t change, include human ‘fear and greed’, and the existence of economic and market cycles, although the length and shape of these cycles can differ quite significantly. Silverman says that the focus on the 'human' aspect of investing has led to an intense recent focus on the field of behavioural finance. Much has been written about why investors keep making the same mistakes that lead, for example, to the re-occurrence over time, region and asset class of 'bubbles'. But most things do change and often with alarming speed and with little or no warning.

Focusing on change, especially material change or 'defining' events, is essential and has become a cornerstone of the Investment Solutions investment team operation. In investment markets, the key variable is time itself. For example, most studies show that 'value' investing or shares outperform over the longer term, but it can take a long time to happen. This is one reason why value managers hold a basket of shares, as value is unlocked slowly and sporadically over time.

'We know expensive assets tend to underperform once momentum is lost, but the wait can be frustratingly long for the investor. For example, property prices in a number of major developed countries seem too high, yet the timing of their 'return to fair value' (decline), is uncertain,' says Silverman. It could take decades and, in the interim, prices could still hit new highs. But it could also happen suddenly. This is one reason why many are re-looking at the use of some form of ‘asset-allocation’ overlay to take advantage of market opportunities, he says. 'These seek to add value through more short/medium-term calls on relative asset-class performance, especially in a world where absolute returns are pretty muted, and likely to remain so for some time, and volatility prevails.'

Silverman says investors are increasingly seeking 'investment solutions' that can provide either higher outperformance of a benchmark, or more closely match a liability stream -- especially in the corporate/pensions market -- or provide a smoother ride. He believes the latter has been responsible for the rapid growth in real-return and absolute-return funds, including hedge funds.

'The jury is still out on whether these new asset classes/solutions will necessarily match up to the hype and promises that surround them. But in a complicated ever-changing world, where the only ‘constant is change’, one has no option, but to remain vigilant and consider all the alternative investment ‘solutions’,' he says.