Asset Allocation Diversification

Hi Everyone!
Just a few more notes on diversification. This is for those who want to improve their portfolio.

Diversification is a good defense/protection strategy for those who aren't as versed quite well with the market. And I suspect, that's for most of us here. Not everybody is a seasoned stock broker. And even these professionals make some mistakes and lose a lot. If you don't have enough money to throw away, don't put all your eggs in one basket.


Diversification comes in at least the following 3 ways:

1. Diversify your risks. The following have varying degrees of risks. Generally the higher the risk, the higher the profit. That's one of the basic laws of investing. The trick is to diversify on the different type of investments that you have. - invest in equities (stocks), bonds, mutual funds, real estate, pension plans, time-deposits

2.  Diversify your currencies. If you invest in just one, you might gain in the share prices 9captial gains) but lose in the currency conversion rate. If you diversify, you offset your other investments' losses.  Strong currency investments can offset weak currency investments. (like in the relationship between the Peso and the US Dollar). - There is the Euro, the Dollar, the Peso, etc...

3. Diversify your companies. Each company has a different fund manager, hence different investment strategies. Their strategy could spell the difference between your success and your failure. If you're not too familiar with the fund managers, I suggest you diversify on this as well. - Philequity, MAA, Prudential Optima, Grepalife Assets, AyalaLand, Crown Asia, etc...

If you know the best approach, they say it is better to concentrate. I agree. But if you can't predict the future, safeguard your portfolio. Don't pretend to know what will happen. Play it safe. It's always better than be sorry.