Originally posted on December 15, 2019 @ 7:53 pm
Five Reasons Why You Should Diversify Your Investments with fixed income portfolio management Diversifying your investments is a good thing. Investments can be gold, equity in companies, real estate, bonds, and others. So why is diversification so important? Let us find out. Asset allocation Dividing your money between your assets will be one of the most important decisions you take in your life. So the question is how will you choose between investment classes? Give it serious thought, because this is an important matter. You have to be sure that your hard-earned payroll is going into the right channels. You should choose asset classes after careful deliberation on your long-term goals. Correlation The reason we diversify our investments is because we know all asset classes will not move in the same direction. When the equity market is up, gold prices might not be. When there is boom in the property market, the stock market might be lacklustre. The idea is to remain invested in assets that are acting slightly different from the others in your portfolio.