What is diversifying investments and why is it important?
Every investor seeks the balance between profitability and risk, for this reason diversifying is useful and is within the reach of any profile (conservative, moderate or risky), says Santander.
When you invest, the assets you choose can make profits or have losses. When you don’t put all your marbles in the same bag, you reduce the dangers that your assets face when you seek to maximize your returns, adds BBVA.
To have a portfolio capable of maximizing performance and minimizing risk, the correct combination of several asset classes that are not perfectly correlated must be found, Actinver emphasizes.
To diversify you can choose from a wide range of possibilities between low, moderate and high risk options, all depending, among other things, on your investor profile, the term and the goals you have set for yourself when investing.
Among the instruments that you can use, government bonds stand out. In the case of Mexico, you can choose Cetes or another type of government bond; You can also opt for shares of companies from various sectors that are listed on the stock market – in Mexico or abroad -, ETFs, dividends, gold, among many others.
What happens if I only have investments in one place?
When you bet all your cards on a particular asset, and it is going to go downhill for a certain reason in the market, you will only have to hold on to find out how much your loss will be.
If you put all your capital in a fund that has lost 50% of its value in a certain period, you lost half the value of your portfolio. But, if this investment is only one of your four portfolios and the value is lost, thanks to the help of your other three the ship can stay afloat and the blow will not be as drastic as the first scenario, says BBVA.
It is true that diversification theory is not infallible and has limits that other models have tried to overcome. However, don’t forget about diversification to build a portfolio according to your objectives, he adds.
Before choosing various instruments in search of maximizing profits, remember that it is also important that you know where you are going to put your money.