It involves making an investment across various assets or asset classes for reducing the risk involved. The logic is simple: if one does not put all his eggs in one... Read More
Author: factsheet22
Managing risk is one of the main factors why people invest in mutual funds. Probably, no other concept found in investing can be viewed beyond diversification. Thus, this article explores... Read More
Common Misconceptions on Diversification Some of the common myths on diversification are: 1. Diversification Will Automatically Result in Returns: As much as diversification can reduce risk, it never guarantees profits. Market conditions... Read More
Periodically Monitor Your Portfolio: Diversification is not a once-off. Periodically monitor your portfolio to ensure that it goes along with your investment objectives and risk tolerance. Rebalancing may be necessary... Read More
: Invest in funds that track both domestic and international markets. Because the global economic conditions differ, international investments also provide higher returns. 4. Index funds or ETFs: Index funds and... Read More
. Diversification across different sectors: Under the equity funds, consider the funds that specialize in different sectors such as technology, healthcare, finance, and consumer goods. If one sector is not... Read More
Here is how one can practically diversify a mutual fund portfolio. 1. Diversification across different asset classes: Invest in a combination of equity funds, bond funds, and maybe even alternative investments... Read More
. Risk Reduction: The most significant advantage of diversification is the reduction of risks. For example, if the sector of technology is going down, then the losses can be curtailed... Read More
. Among Different Funds: Another way in which diversification can be done by investors is through holding various mutual funds, where every mutual fund specializes in some different asset class... Read More
Within the Fund: A mutual fund usually invests in a wide range of securities, such as stocks, bonds, or real estate. A well-managed fund will hold a variety of investments... Read More