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Make Sure You Diversify Your Portfolio

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Make Sure You Diversify Your Portfolio
All sensible investors know about diversification and why it’s essential for a successful portfolio. It’s really important for you to own stocks from various industries and sectors, as well as from different territories and even in different forms, like commodities, stocks and ETFs. Having a diversified portfolio spreads out the overall risk to it because if one company or sector takes a hit, the rest of the assets bear up and stop your portfolio losing too much, if any, value.

It looks like we may be facing some turbulent economic times soon, too, so diversification is even more important. Times like these make investing in physical assets a really good idea because when things are unstable and financial indices are unpredictable, tangible assets come to the rescue. Precious metals are ideal here, so look into bringing some into your portfolio; you’d be surprised by cheaply you can get started.


Make Sure You Diversify Your Portfolio 


Why should you diversify beyond your regular stocks

diversify regular stocks
Most people think diversification is more about having holdings in different sectors and commodities; they rarely think about buying and holding the actual physical thing. Having lots of different industries and sectors is great, especially while the economy’s buoyant, but we all know that the sky isn’t always blue. If a big market correction is on the cards, then physical assets can act as an insurance. This is why investors are increasingly choosing to buy gold, silver and other metals.

When there is a market correction, some investors panic, sell their usual stocks and plough the money into precious metals. This reduces the market supply of metals, which pushes up their prices.

So, if the economy falters in 2019, or we’re suddenly hit with high inflation, your precious metals won’t be facing the same risks as your paper commodities and your dollar-linked vehicles. Back in the 2008 global crash, gold did much better than pretty much all the stock-based portfolios out there. Now is the best time in a long while to go shopping for metals because there’s a chance that their prices might start to rise soon.

You also need to diversify your metal portfolio

diversify your metal portfolio
Most metals investors start off with gold and silver – the trusty old players – but it’s a good idea to add in platinum, copper and palladium, as well as vary the size and formats of your bars, ingots and coins. Having different sizes, from gram to ounce, for example, means you can sell smaller bars to raise smaller amounts of cash.

Of course, the crash will probably not be anything as bad as we’re imagining. This doesn’t mean that you’ve wasted all your money on a bunch of shiny trinkets, though! Metals always increase in value, with a few dips along the way, of course, so after a few years you’ll have your pile of precious metals and it’ll have grown in value. You can sell some or all of it at a decent profit, or maybe pass it onto the children or grandchildren so they can use it for their college funds or house deposits.



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