INSPIRATION – IAN GOH
June 23, 2023
When it comes to building a successful investment portfolio, one key principle to remember is diversification. Diversification is the practice of spreading your investments across different asset classes to mitigate risk and maximize potential returns.
And, while stocks or gold can be a valuable addition to your portfolio, it’s important to balance it with other assets to achieve a well-rounded and diversified investment strategy. So, let’s explore why diversification is key and how you can achieve it.
Diversification is the antidote to putting all your eggs in one basket. By investing in a variety of assets, you reduce the risk of being heavily impacted by the performance of a single investment. Different asset classes, such as stocks, bonds, real estate, and commodities like gold, tend to have varying levels of risk and return potential.
By diversifying, you can potentially benefit from the positive performance of one asset class while mitigating the impact of a downturn in another. Achieving diversification requires careful consideration and ongoing monitoring of your portfolio.
It’s important to assess your investment goals, time horizon, and risk tolerance to determine the appropriate allocation to different asset classes. Regularly reviewing and rebalancing your portfolio can help ensure that it remains aligned with your objectives and risk tolerance.
About The Author
