DIVERSIFICATION OF THE PORTFOLIO
Continuing with the articles on risk management, I would like to mention one of the strategies most used by professional investors in the stock markets. This strategy is the diversification of the portfolio at the time of buying our assets.
This diversification is one of the most important factors in our stock exchange investment strategy. For example, we must buy shares of different indexs or markets. Since if an index falls, 85% of the shares of that index will also fall, we must invest in shares of different indexs.
We can diversify by countries. If the economy of a country begins to weaken, it would not be smart to have invested all our assets in shares of that country. It is smarter to buy shares of different world economies, the more spread out better.
Finally, we are going to diversify our purchase of shares distributed in different sectors. These can include the pharmaceutical, energy, banking, industrial, etc... Thus if the economy in one of these sectors slows down we will be invested in sectors that are still growing.
Diversification is one of the easiest and most important strategies to follow. Since we have thousands of different stocks to choose from, we will always choose the ones with the greatest diversification.
