Welcome to our Guide to Managing Investment Risk. One of the most effective ways to manage investment risk is to spread your money across a range of assets that, historically, have tended to
perform differently in the same circumstances. This is called ‘diversification’ – reducing the risk of your portfolio by choosing a mix of investments.
In the most general sense, there are many adages: ‘Don’t put all of your eggs in one basket’, ‘Buy low, sell high’, and ‘Bears and bulls make money, but pigs get slaughtered’. While that
sentiment certainly captures the essence of the issue, it provides little guidance on the practical implications of the role that diversification plays in a portfolio. And, ultimately, there is no
If you would like to read this full article, please click here