Start Working On Your Financial Goals Today

Ask your questions by clicking the button below

Investment Portfolio Defined

Investment Portfolio

Investment Portfolio- Diversified Portfolio

Starting an investment?  What is an investment portfolio anyway? By definition, an investment portfolio is “a collection of financial assets such as stocks, bonds, property and cash”. An Investment Portfolio may be held by individual investors and/or managed by financial experts, hedge funds, banks and other financial institutions”.

Having a good diversified investment portfolio is something that everyone, who does any kind of investing, needs. Diversifying your investments is a good idea, especially in the event that one area of your investments takes a loss. By focusing your investments in only one area of the market, you are more prone to run into a larger loss if that part of the market does poorly during a given time period. By diversifying your investments, the profitable investments can make up for the poor ones. This allows you to weather out tough times as they say.

Investment Portfolio- How to have a Diversified Portfolio

One of the most important principles followed by most investors is Diversification.  Diversification is a method used by investors to combine a number of investments together to reduce investment risk. Listed below are several types of investment diversification.

Asset diversification- this type of diversification is where investment is grouped in asset classes. These asset classes vary but they typically consist of the following

  • Cash or money market
  • Bonds or fixed interest
  • Equities i.e. company shares or stocks
  • Alternative funds e.g. real estate, commodities, and hedge funds.

Geographical diversification- Assets differ greatly depending on their current location. This is due to the fact that every country has different factors affecting their current state such as currency, economy or industrial development.

Sector diversification and number of holdings-Market trends and conditions often favor one sector over the other.  Market trends affects and differ from country to country, it is a good idea to watch which sector is doing well on the particular country.

Time diversification- A simple way to reduce risk is to invest for the long term. Taking a long term view allows your investment more time to grow and possibly make up for any short term fluctuations.

Alternative investments- Alternative investments have become more readily available. Typically these funds try to provide positive returns regardless of market direction; these include

  • Real estate
  • Commodities
  • Absolute returns funds – including hedge funds
  • Long/short funds

Investment Portfolio- Benefits of Having a Diversified Portfolio

It is difficult to predict which asset classes, sectors or geographies will perform well. Diversification is a key tool in managing investment risk. Choosing the right spread of investments to create a diversified portfolio will help to reduce risk yet also increase the chance of exposure to investment gains.  Wise investors spread their investments to lessen the effects of any poor performance of one part of their investment portfolio.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

readers also liked

Page [tcb_pagination_current_page] of [tcb_pagination_total_pages]

What people are saying

Provided Me A Tailor-made Solution

What a refreshing difference to past experiences with other financial consultants, he did not try to squeeze me into a “one size fits all package” but provided a “Tailor Made Solution” based on my specific requirements together with some optional, good advice.

The choice of Amit as my Personal Wealth Adviser was a good one and I can recommend him with confidence to anyone who is concerned about preserving and growing their wealth.

The worst thing that happens to Amit's client's is they save more money

The worst thing that happens to Amit's clients is - they save more money than before they met him. He takes you from "I don't know where my money goes each month", to "Wow, I started saving a lot of money every month”.

I have known Amit for a little over 7 years and am really confident of his knowledge, skills and expertise in this field. At the end of the day, you need someone who is just a call away and you can trust with your money.

Prakash Gurnani
Head of Fednet NOC

I Would Recommend Him Without Hesitation

I've got in touch with Amit several years back and have taken a number of insurances / policies through him.

Amit has in-depth knowledge of the market and knew exactly what I wanted and was looking for. I would recommend him without hesitation to anyone who's looking for valuable financial advice, whether it is about a savings plan, income protection or retirement planning.

Valuable Financial Advice

Amit has provided very valuable financial advice, He is good at understanding your unique needs and providing sound recommendations leveraging his deep experience and knowledge.

Yash Arya

Trustworthy & Reliable

Amit is detail- oriented, trustworthy and reliable for sensitive area of finances. genuinely helps his clients for decision making with right advice.

no more excuses, Not To get your money working for you!!!

Check-out the latest and best retail investment platform

  • curated investment ideas with financial data & expert recomendations
  • start investing with whatever amount you like
  • no commitment to add money
  • Access your money anytime
  • no entry or exit charges
  • Lowest fees ever