WHY PORTFOLIO DIVERSIFICATION IS KEY IN 2025
Have you heard about the need to diversify your investment strategy but not sure what this means?
Diversification can happen in many ways:
- Investing in different market sectors, such as Energy, Finance and Banks, Healthcare, and Infrastructure/ Property.
- Investing in different geographical markets, such as Australia, Asia, USA, and Europe.
- Have a balance of investments such as cash, term deposits, direct shares or Exchange Traded Funds.
The goal should be to increase your chance of a stable return and reduce your dependency on one type of investment. There is a lot of noise coming out of the US with President Trump and his Tariffs and economic agenda. Australia also has the upcoming federal election and cost of living crisis. We believe volatility is reduced significantly by having a diversification strategy in play.
Many clients have a preference to investing in the residential property market. However, we have seen the property returns reduced due to land tax, high interest rates and a property downturn. Many clients are turning to Equity Portfolio’s that offer diversification across asset classes and regions, offering easy access cash when required and being able to invest in line with your Risk Profile.
We have heard people talk about how cryptocurrency is a great investment. But did you know that some crypto is nothing more than a glorified Ponzi scheme? Someone needs to lose for an investor to win. Putting all your eggs in this basket could be disastrous. Crypto trading is high risk and highly Volatile.
An investment portfolio aligned to your Risk Profile whether that’s Conservative, Balanced or Growth is important for your peace of mind and key to a successful Financial Plan.
Please call us to review your risk profile and to review your diversification strategy.