Diversification Explained

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$1000 INVESTED IN AXS COULD HAVE EQUALLED $38,000 PROFIT IN LESS THAN 2 MONTHS*

 

When any change happens, often it can be a sign that we need to change, to keep up with the change… and survive or evolve to a better way of doing things.

Do you know about diversification?

Essentially, it is an investment strategy that lowers your investment portfolio's risk and helps you get more stable returns.  You diversify by investing your money across different asset classes, such as shares, property, bonds and private equity. Then you can further diversify across the different options within each asset class. For example, if you buy shares, you can buy across a range of different sectors such as financials, resources, healthcare and energy, or you can diversify in property by investing in different locations and property types.  Having a variety of investments with different risks can balance out the overall risk of a portfolio.

With change all around us, now just might be the time to review your investments and look for opportunities to diversify.

How to diversify

Firstly, you need to take the time to review your investments.  List all your investments and what they are worth. This could include:

  • cash in a savings account
  • shares
  • managed funds
  • an investment property
  • your home
  • your superannuation

This will then show you, which asset classes you are investing in and where you can diversify.

Have you considered shares?

The Australia Stock Market (ASX) can appear daunting to some, but what if you knew that investing in After Pay* could have returned $38,000 on $1000 in less than 2 months.

If you want to learn more about the ASX you can join the next ASX GAME. The Game gives you an opportunity to learn about the share market and how it works. You get $50,000 virtual cash. You can buy and sell shares in 200+ nominated companies listed on ASX using live prices and will be charged brokerage on each trade, simulating real share market conditions.

So, if you are thinking about trading but not quite ready to step in yet, the Share market Game is a great way to test your strategies. Plus, entry is free and there are some great prizes. The next ASX registration opens 16 July for the Game: 6 August - 18 November.

https://www.asx.com.au/education/sharemarket-game.htm

Your superannuation funds investment strategies can also be a great reference for a good example of diversification. All you need to do is check your fund's website or annual statement to see how they invest. See super investment options for more information.

* AXS March 23 price 8.9 | May 15 price 41.2 a 32.3 price jump in less than 2 months

Have you considered investment property?

If you want to discuss investment property options further contact Raine & Horne Surfers Paradise today.

[email protected]