A Financial Services Partners Adviser may recommend a diversification strategy as a part of your investment portfolio. They will review your situation to determine the most appropriate level of diversification that is right for you.
What is diversification?
Diversification refers to spreading your investments across a wide variety of asset classes to reduce investment risk.
Each of your investments can perform differently at different times of the economic cycle. It is impossible to predict which of your investments is going to be the best performer from one year to the next.
There are generally four ways a financial adviser can implement diversification as a part of your investment strategy. These include:
- Using different asset classes (shares, property, cash)
- Using a range of assets within each asset class
- Using different fund managers to manage these different assets
- Using local and international investments
- Spreading the timing of your investments (known as Dollar Cost Averaging).
What kind of goals can diversification be used for?
Diversification may be suitable for people who:
- wish to reduce the investment risk and volatility within their investment portfolio
- wish to accumulate wealth
- are comfortable in holding different kinds of assets within their investment portfolio.
A Financial Services Partners Adviser may recommend a diversification strategy as a part of your investment portfolio. They will consider your needs, objectives and situation before they decide what diversification is right for you.