Advantages Of A Diversified Portfolio During Difficult Markets


In the past couple of years, manifestations resulting from the impending debt crisis in Europe in addition to the melt down on Wall Street have come to fruition and are playing out on the various news outlets. No matter your political affiliations or ideology, we are all very wary of the price of gas, food and shelter not to mention the future of our kids.Recent natural disasters like have took place in Haiti and Japan along with social, political and economic unrest are reeking chaos on the financial markets and the fragile globally interdependent economies on the planet. It may seem an understatement to describe investing in this current environment as anything less than a lot more challenging than ever. So, taking steps toward an intelligently diversified portfolio to protect yourself should be an ongoing activity.While a few have selected the posture of total inaction “until things settle out”, the reality is that doing nothing certainly will not cut it. Although, it’s true that trading and investing in this economy has become more difficult than ever before, you can’t just not do anything and expect you’ll come through it all unscathed.Inflation plus the natural order of things does not allow a status quo and will inevitably lead to an overall decline in your net worth. You’ve heard it before, “There’s big profits to be made in down markets”. You need to have a sound financial plan, perform your due diligence and know what you’re looking at. Then intelligently diversify your portfolio, especially when times are tough.Overall, proven money generating methods are best. Seek out systems that have been around for more than just a year or so. Bear in mind that the basics of investing apply much more strictly in bad times compared to good. Don’t invest money you can’t afford to loose. It has to be “investment capital”.Research investments with good return potential in relation to a small risk factor. When trading anything, only use proper management of your capital and never risk more than 3% on your account per trade, particularly when you could really use a nice big winner to turn things around. This is where your overall trading strategy comes into play along with the discipline to stick with the plan.Find something that has worked consistently historically which is relatively liquid like option trading on equity stocks, penny stocks and conservative longterm foreign currency trading. Verified forex signal services generally is a good investment. You may want to even consider property investing given that the market has begun to bottom out.The bottom line is to protect your assets through diversification. When your select variety of investments are isolated, seed these with minimal outlays and monitor them very closely to see what takes root. Then move larger amounts to the ones that bear fruit on a gradient basis. In other words, never put all your eggs in a single basket! Have realistic expectations and aim for steady overall growth. Take your small losses from the investments that didn’t work and move forward.I can not emphasize this next point strongly enough. Give your investments enough time so that you can make an educated decision. A few loosing months throughout an overall up trend is not necessarily cause to jettison an investment. In fact, this can be a good sign. All truly verified performance results will show their loosing months during current and prior years.Stay away from performance returns where there are never any losses. In many cases they’re not real! Losses naturally exist in actual trading and investing because the markets fluctuate both in good times and bad. Too frequently, people are looking for the holy grail. They think they’ve done their homework because they found something that’s never has suffered looses. Investment vehicles that are able to absorb losses and survive usually tend to attain stable profit over the long term. Those systems that do not show many or any losses, more often than not don’t survive for the long haul.