What is the best way to diversify my investments?

Gustav NeethlingArticleLeave a Comment

Diversified-Investments

We’ve all heard the old adage before – “Don’t put all your eggs in one basket”. But practically how should you approach this and what is the best way? There are four major investment vehicles you can use to make your money grow :

– Equity : these are shares in a company
– Property : any property including storage, retail, office space or a warehouse
– Bonds : this is a long-term debt agreement with a government or a big commercial company
– Cash : includes all the various cash or cash like instruments like fixed deposits and savings accounts

All of the above options referred to as asset classes exist in South Africa (in Rands) or offshore in any currency that you would like to invest in – there is thus eight options available in total.

It is always very difficult to choose the asset class and extremely risky if you only invest in one of the eight options. The best solution is to choose a combination of the eight options and build your ideal portfolio. The portfolio that you’ll create will then deliver your required return while only taking the necessary (minimum) risk.

What would work for you will largely be driven by your risk profile.

Do you know your risk profile or the amount of risk you are happy to take onboard?

WealthPro will be launching a risk profile questionnaire within the next month to assist you with this.

Once you know your risk profile, your ideal portfolio will fall onto a range of portfolios that will fall into what is known as the efficient frontier. This is in effect a combination of the most efficient portfolios available. We will create your ideal portfolio depending on your needs. Just follow the following steps :

• Register for free
• Create different goals that you have
• Complete the risk profile questionnaire (will be available shortly)
• With that information we will automatically create your ideal portfolio – perfectly diversified that will fit into the efficient frontier
• Sit back and relax and watch how your investment performs

Once the investment is finalised you will see how the investment is diversified between the asset classes mentioned above including the individual shares that you own in the investment. This will create a feeling of empowerment. Repeat the process with your other goals and you’ll see how you crush all your goals. Start your journey today.

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