At its most basic, having a diversified portfolio is simply the investment version of the phrase ‘don’t put all of your eggs in one basket’. But true diversification is more than just buying shares in lots of different companies. A properly diversified portfolio usually includes different types of assets, as well as investments in different types of businesses from different areas of the globe.
A performance horizon of five years is generally accepted as a good barometer for a fund’s overall success. A one-year time scale isn’t long enough to judge whether a fund looks like a good long term bet for your money.
Becoming a DIY investor means making your investment decisions without having to pay for financial advice. This might seem a daunting prospect, but this article will help you by equipping you with the basics of portfolio construction, management and strategy.