Diversification

Diversification is often described as “not putting all your eggs in one basket” and is an important part of a long-term investment strategy. The aim is to spread portfolio risk while maximising returns based on an investor’s individual investment objectives and risk tolerance.

By spreading investments across different asset classes, potential losses in one asset class can be offset by gains in another, reducing the overall risk of the portfolio. This process is known as diversification and can help to reduce the volatility of the portfolio.