Guidelines for Successful Investment Diversification

to diversify

One of the keys you have to protect your equity operations is undoubtedly to diversify your investments. Because in effect, you will not only be able to boost profitability from the same. If not, it will also help you to live with the most unfavorable scenarios for the stock market. Where the greatest risk you have is that all the movements that you have open at that specific moment. In addition, it will be a very easy strategy to apply and that is open to all profiles of small and medium investors.

Because what it is about is that you do not invest all your savings in the same basket of financial assets. But on the contrary, you distribute it between different forms of investment and why not among various financial products. From the most conventional to those that carry greater risks in their operations. Their combination can bring you many benefits from now on. To the point that you will improve the return you will get on your savings. It is the purpose that after all you will be looking for from the beginning.

One of the great advantages that this investment system implies is that it will allow you to choose different solutions. Some of them very traditional, but others of them really original and in cases even certainly innovative. So that the end your relationships with the world of money are much more satisfactory than until now. You will only have to put a little interest and above all a lot of discipline to carry them out with a perfect correction. With all certainty, it will be worth it for the best results that you can obtain from these investment approaches.

Diversify in investment


Of course it will be necessary that to diversify your investments you go to different financial models. The key to success is that you can combine equities with fixed income, even with alternative formats as the most appropriate formula to protect your monetary capital from the beginning. You have many variants, as many as designs made by financial institutions. Where you will only have to search and detect the one that best suits your conditions as a retail investor.

One of the most effective solutions offered by the financial market comes from Investment funds. Because it is a product that allows any financial asset to be combined in the same model. With the advantage that you have many funds to choose from and that present this characteristic. These are active management models developed by the entities in charge of designing this very special investment. Even contracted from other currencies other than the euro: dollar, francs or Japanese yen.

Investment funds that mix various financial assets carry a series of advantages for investment diversification. Among them, that your losses will be less in the least favorable scenarios for the financial markets. So that in this way you can function better in all possible scenarios. One of the models that best capture this trend are mixed investment funds. They combine all kinds of income, without having to give up any kind of financial proposal. From all perspectives: aggressive, defensive or intermediate.

Subscribe bank products

Another of the strategies to diversify your savings is to contract banking products away from what is pure investment. Time deposits, bank promissory notes or high-income accounts will be some of them. The first contribution of this savings model is derived that it will provide you with a fixed and guaranteed return every year. Your remuneration will not be very high, but at least you will not lose money in any of the falls. They are an interest that will rarely exceed the 2% levels. It will be a very conservative strategy, but in any case it will bring a lot of stability to your portfolio. Especially when financial markets show a lot of uncertainty.

You can allocate a part of your savings to these banking products to diversify operations. In addition, they are very simple savings models to hire that do not require special knowledge on your part. Although in most cases you will have to wait for their expiration so that the benefits go to your checking account. With the complete assurance that you will have a guaranteed return on your savings. Not surprisingly, they are the products where the money of your parents or grandparents was directed to make it profitable.

These products are very affordable for all households. Because they can be hired from very little money. Habitually from financial contributions from 1.000 euros. With different periods of permanence depending on your real needs to cover the expenses from that moment. Although you will have the problem that you will not be able to cancel them in advance, because even banks can apply a commission of this characteristic that is around 2%.

Go to other international places


Another key to diversifying your savings is based on not limiting yourself only to national financial markets. You can take advantage of the push for other trading floors to increase your checking account balance. Because in effect, in this way you will be in a better position to open up to new business opportunities that are present in other destinations in the international economy. Not only from equities, but also from fixed income. But above all through alternative investment models: raw materials, precious metals, etc.

One of the effects of this very particular strategy will be that you will be able to reach more destinations for your money. And as a consequence of them, the possibilities of improving your returns will rise significantly compared to other forms of investment. It is also true that you will have to take greater risks, but it is the toll you will have to pay to be more ambitious in your claims to relate to the world of money. To reach financial markets that until a few years ago were totally inaccessible. Well, from now on you can opt for this alternative model.

You have in the equities of the United States one of the best markets to make this wish effective. With the option of going to the technology markets where the best companies in this business sector are included. Or even the Asian markets when their conditions demand it. It is a very beneficial alternative for certain moments in the international economy. To the point that you can renew your investment portfolio from time to time. To boost growth expectations in your income statement.

Choose an active management model

Without a doubt, this performance will give you more than one joy from now on. What is the goal you will achieve? Well, something as simple as adapting to all possible scenarios, even for the least beneficial for your personal interests. Investment funds are the ones who best pick up this strategy. Where the managers themselves are in charge of updating financial assets depending on market conditions. With periodic reviews of investment portfolios. As the only formula to increase the return on investments.

At any given time, fixed or variable income can be promoted, choosing the best business opportunities on each occasion. Even with the possibility of hedging euro positions. To avoid unwanted movements as a result of the prices of the main international currencies. In any case, it is a model that an increasing number of investors are opting for. The fund managers are in charge of carrying out these operations. You will not have to do anything, since for that they are called active investment funds.

Do not invest all the money


Diversification should also be supported by operations developed with a very important part of your savings, but leaving some liquidity in your checking account. First of all, for protect your positions in the face of an unfavorable trend in financial markets. But also to be in a position to take advantage of the business opportunities that will appear in the coming months. For this to be the case, you will have no choice but to leave some ammo to boost your operations.

The percentage of your investments should be the one that is in line with the investor profile you present. It will not be the same in an aggressive saver than in another clearly defensive one. You should also ask yourself what is the level of expenses to which you will have to face during the next months. With the aim of not falling into the temptation of making bad operations in the investment. Derived from your need to find some liquidity to cover these monetary disbursements.

It will also be highly recommended that distribute your savings proportionally among the different financial products chosen. Under the levels that you consider most appropriate to defend your personal interests. Where the least part of your contributions should go to the products that carry higher levels of risk. With a minimal part it will be more than enough to satisfy this demand. Because it is where you can lose more money if the investment does not meet the expectations created from the beginning.

Well, if you listen to some of these tips, do not doubt that your investments will go much better from now on. With greater chances of yields increasing. If not substantially, yes at least so that you can notice it more clearly in the balance of your savings account. To the point that you can pay yourself the odd personal whim.

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  1.   Edward Ernest Garay said

    As if to fall in terror in Argentina. The fixed term has a 49% annual rate. A 30-day deposit gives that rent, 4.28% per month. Making a rough calculation of renewing the amount and the accumulated monthly interest on a monthly basis would give us 65.35% in 12 months. The question would be, how would such a mountain of profitability of national money be sustained if there is a very large mass put into this banking product? In addition, this would only maintain the value of the deposit at a conservative level of investment since the devaluation of Argentine money will be around 58 to 64% with respect to the merchandise sold in the domestic market and an official inflation of 49 to 54% annually.