KredX Blog KredX Blog
  • HOME
  • PRODUCTS
    logo

    FOR BUSINESS logo

    logo

    FOR INVESTORS logo

    Invoice Discounting

    Unlock money tied up in unpaid invoices

    KNOW MORE

    KredX Pay Later

    A closed loop financing for your dealers/distributors/Retailers

    KNOW MORE

    KredX Cash Management Solutions (CMS)

    Get real-time analytics. Manage disputes. Minimise risks. Get risk-free returns

    KNOW MORE

    KredX Global Trade

    Get Quick Finance To Fund Your Import-Export Requirements

    KNOW MORE

    Invoice Discounting

    Diversify your portfolio with alternative short-term investments

    KNOW MORE
  • PARTNER WITH US

    Business Partner Program

    Accelerate your client’s business growth and get attractive payouts on time

    KNOW MORE

    Financial Advisor Program

    Grow your credibility and clients’ investment portfolio

    KNOW MORE
  • KNOWLEDGE CENTER

    FAQs

    Blog

    Knowledge Base

    Webinars

    Reports

    WhitePapers

    Podcasts

  • COMPANY
  • LOGIN / SIGNUP
  1. Home
  2. Finance Planning
  3. How To Diversify Your Portfolio?
 How To Diversify Your Portfolio?
Finance Planning Investor

How To Diversify Your Portfolio?

by KredX Editorial Team March 11, 2019 0 Comment

The modern portfolio theory states that 15-20 stocks from different sectors are sufficient to make a well-diversified portfolio.

What is Diversification?

Diversification is the practice of expanding your investments in a manner that the exposure to any single type of asset is limited. It is a struggle for many financial planners, individual investors and fund managers alike. During the time of the market boom, it seems unfair to sell a stock for any amount less than the price at which you bought it. A boom in the market looks very appealing and as such investing in equities seems like the best idea, but a well-diversified portfolio is needed because we can never be sure of how the market will behave at any moment.

Here are five tips to diversify your portfolios:

1. Consider bonds or index funds: Apart from all the funds out there in the market, it is advisable to add index funds or fixed income funds to the existing funds. Investing in securities that track different indexes make an amazing long-term diversification investment for your portfolio. Your portfolio is further hedged against market volatility and uncertainty by adding some fixed-income solutions.

2. Keep building your portfolio: Make sure regular additions are made to your investments. If you have money to invest in dollars, use dollar-cost averaging. This technique is used to even out the ups and downs created by market volatility. This also enables you to invest money consistently into a specified portfolio of securities.

3. Keep a watchful eye on commissions: If you don’t understand trading very well,  make sure you at least understand what you are receiving for the fees you are paying. There are some firms who will charge you on a monthly basis whereas there are some who will charge you a transaction fee. Make sure you are alert and know what you are paying.

4. Spread the wealth: It is important to not put all your money in one stock or one sector, no matter how appealing equities may seem. It is better to create your own virtual mutual fund by investing in a handful of companies you know and trust. These could also be the companies whose product you use on a daily basis, or you hear about every day. Knowing a company and its products can be a healthy and beneficial approach to this sector.

5. Know when to get out: Just because you are good at buying, holding and dollar-cost averaging and have your investment on autopilot, it does not mean you should not recognise the signs of pulling the plug.  It is important to be aware of the change in market conditions and take the necessary steps when required.

While these are just some of the factors that help to diversify the portfolio, there are many other underlying factors that can be added to the list. Portfolio Diversification is an essential component while investing and identifying the need for it and applying them at the correct time is critical.

Share This:
Tags: financial planning index funds Investing investments Investors Portfolio diversification
Previous post
Next post

KredX Editorial Team (Website)

administrator

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Enquire now

  • Invalid value

  • Invalid value

  • Invalid value

The Best Of Alternative Investments, Now On Your Phone

Download App:

KredX Blog KredX Blog

Wing ‘A’, Ground Floor, Office-1 Block-‘A’, Salarpuria Softzone, Bellandur Village, Varthur Hobli, Bangalore South Taluk, Outer Ring Road, Bangalore – 560103

+1 212-602-9641

info@example.com

Get More Location

Follow us:

Download app:

Company

Home
About Us
Careers
Contact Us
Our Offices

Resources

Blog
Reports
Whitepapers
Knowledge Base
Podcasts
Webinars

Support

FAQs
Talk To Our Advisor
Chat With Us
Sign Up
Login

Legal

Nodal Officer Name: Amrutha A / Ph: 08061799200, IVR-9 / Email: Amrutha@Kredx.Com
Terms And Conditions
Privacy Policy

Investor Products

Invoice Discounting
Bonds
Digital Gold/Silver
KredX Assured

Business Products

Invoice Discounting
Buy Now Pay Later
KredX Cash Management Solutions
KredX Global Trade

Quick Links

Business Partner Program
Financial Advisor Program
Business Suite
©2022 Minions Ventures Pvt Ltd