Portfolio diversification is basically not putting all your eggs in one basket. However, it’s not as easy as it sounds.
If you have no clue as to where to put your eggs, this article will help you decide. Check out the list below!
This is one of the most in-demand investments in the market. When you invest in stocks you achieve the following:
A bond is basically a loan that the issuer (company, government, or another entity) has to pay with regular interest.
There are many different types of bonds and they sport different risk levels. However, bonds are generally less risky than stocks. So throwing some of them in the mix can help with diversification.
Now, if you’re looking for a faster way to diversify, mutual funds and ETFs are good bets. Buying them is like buying a set of baskets instead of individual eggs.
If you’re not familiar with how options work, here’s the gist:
Now here’s a small caveat: options contracts are quite more complicated than other assets. They help a lot with diversification, but you must be sure to hit the books first.
Just like options, futures are also derivative contracts. With futures, you agree to buy or all an asset at a pre-set future date and price. Unlike options, you have the obligation to buy or sell when the predetermined date arrives.
The forex market will never go out of style. Helping with portfolio diversification, the forex market is a very accessible and highly liquid market.
You can buy various currency pairs and earn from their movements. In a manner of speaking, you’re playing with money to gain money.
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