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Stratifying your assets (diversification)
By Rainbow Coin  •  March 17, 2020
When we talk about diversification, it means building a portfolio with assets that are not highly correlated.
"Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk." - Source: Investopedia
Below is a table classifying the various assets and how within each asset class further diversification can be put in place.
Asset classes -->Sector / Type -->Geography -->Risk profiles Liquidity
Real Estate sector v variable low
Commodities type low, variable high
Futures sector v high high
Equities sector v high high
Bonds sector v low low, variable
Exchange-traded funds (ETFs) sector v variable high, variable
Cryptocurrencies type high high, variable
Collectibles type low low, variable
Cash and cash eq v low high
However, in a massive market plunge
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By Rainbow Coin
I began exploring the financial world in year 2010, hoping to get out of the rat race and be financially independent. 2010 was the aftermath period of the Lehman crisis when a pretty shaken up market was struggling to recover. On hindsight, that was the perfect time to catch multi-bagger stocks should I be a veteran or at least had some basic knowledge of picking up 'gems'. My learning curve was steep then, as I have absolutely no friends or relative who could shed some light on what's investing about.
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