Diversification of Investment
Diversification of Investment https://www.fundstiger.com/diversification-investment/ “Don’t put all your eggs in one basket”, goes the old adage. Based on your goals you may have allocated your investment into various asset classes such as equities, fixed income, insurance and commodities. But if you do not diversify within each asset class, the exercise, according to analysts, is sub-optimal. Spreading your fixed income investments is fairly simple but in the case of equities you need the right permutations and combinations of different stocks or equity funds to ensure that your portfolio sufficiently straddles good sectors and stocks. The Benefits of Diversification The benefit of diversification in your investments is to minimize the risk of a bad event taking out your entire portfolio. When you keep a high percentage of your portfolio in a single type of investment, you risk losing it if that investment sours. The benefits of diversification include: Minimizes the ris...