One of our main values here at BullsInvest is promoting responsible trading. We want you to be smart about your trading decisions, reduce risk and hopefully, turn steady profits over time.
Diversifying your portfolio is the safest investing strategy in 2021!
It's known that one of the most important aspects of risk management and investing is diversification. It is a concept as simple as the age-old idiom "don't put all of your eggs in one basket."
If you're reading this, here are a few things to know about diversification:
Diversification reduces risk by investing in assets that span different financial instruments, asset classes, industries, and other categories.
While systematic risks, such as market risks, regulation and business risks on assets held, are generally unavoidable, non-systematic risk can be mitigated b diversifying, using different assets with low correlation.
Balancing a diversified portfolio may come at some cost, and it may come with lower rewards because the risk is mitigated. However, it may offer you investment greater protection over time.
2020 was an exemplary year when it comes to the importance of diversification. Markets saw both tremendous downtrends and all-time highs, creating massive volatility across many different asset classes. So you may find some assets in your investment portfolio with a missing or excess weight relative to the original weight at which they were purchased.
We encourage you to learn more about diversity! Happy and Lucky investing!
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