Whether you are a new or experienced investor, investment diversification is a fundamental strategy, as it offers more security and more opportunities to multiply your equity, without suffering from fluctuations in the financial market. What to know more? Follow the article!
What is investment diversification?
The financial market is a world full of possibilities for those who want to multiply their equity . Among the options, some offer greater risks and therefore greater chances of significant returns. On the other hand, others offer less risk but smaller profits.
Thinking about increasing the probability of success on the money invested, investment diversification is strongly recommended by finance experts.
It consists of investing your equity in different assets of different classes, composing a diversified portfolio. Let’s understand why this strategy is important.
How important is investment diversification?
As mentioned earlier, there are investments that offer lower returns and there are those that offer higher returns, but with more risk. Imagine investing all your money in an asset that offers greater security, but, after a considerable amount of time, realizing that it made little difference in the final amount.
Likewise, imagine putting all your assets into a high-risk product that promises significant profits and, unfortunately, end up losing a considerable amount.
Neither scenario is satisfactory for investors who want to see their assets grow .
For this reason, the best strategy is investment diversification , whether you are a conservative investor or one with a bold profile.
With a diversified portfolio, your money is safer and your chances of making a profit increase. This is because when an asset depreciates, the loss can be offset by the gains from investing in another product.
Benefits of diversifying investments
Do you still have doubts that investment diversification is a good strategy? Let’s talk more about some benefits of having a varied investment portfolio.
Even the aggressive investor, who is more susceptible to the risk of losing money, has greater security when diversifying his investment portfolio.
That’s because, even if he puts his equity in different high-risk products, if one of the assets depreciates, he doesn’t lose all the money, since he didn’t trust everything he has in just one option.
In addition, the profit generated by the other products can compensate for the loss . It is unlikely that all options in the investment portfolio will go down at the same time. Especially if the choice was made with the help of a specialist .
Greater possibilities of making a profit
By diversifying the application of your money, the chances of making profits also increase . If all the assets are successful, you reap good rewards on all sides, resulting in much better results than if you had invested in just one.
This happens because the assets present different performance variations and, in this case, the yields can vary more.
Ease of accessing your resources
Generally, products with lower interest rates offer greater liquidity, while those with a greater possibility of profit require the investor to wait for maturities or reach goals to be able to use the money.
By diversifying the portfolio, you can invest part of the resource in assets that will bring greater results , and part in products with greater liquidity , such as the Selic Treasury, for example.
In this way, you are not helpless in times of need and, at the same time, part of your money continues to yield while it is invested.
How does investment diversification work?
Before choosing an investment diversification strategy, you need to know your investor profile .
Do you have a tolerance for the risk of losing money, as you know that high-risk investments offer the possibility of greater profits? So you are a bold investor .
Are you willing to take risks, but not give up some security? You fit the moderate investor profile .
If security is fundamental for you, even if the profit offered is not very expressive, your investor profile is conservative .
With this information in hand, you need to understand what your goals are when investing . How much do you want to accumulate? What will this money be used for? How much time do you need to reach this goal? How much can you invest periodically?
In this way, it is easier to choose the best assets to invest in order to achieve the established objectives . The best way to make this choice is by relying on specialized management that understands the financial market and selects the assets that offer the best opportunities for your profile.
An expert can help monitor financial market movements and even decide when to close an investment and look for new opportunities.
Why is private pension the best option to diversify investments?
By contracting a private pension plan, first of all, you have at your disposal a specialized service provided by professionals with experience in the financial market, which favors success in the quest to increase equity .
Considering your investor profile, your objectives and how much you are willing to invest monthly or periodically, the brokerage will outline the best strategies to reach your objectives, choosing the best pension funds, aiming at greater profitability and lower chances of losing money .
Over time, if the fund is not delivering the expected results, the broker will make the necessary adjustments , proceeding with portability to another investment fund.
In addition to the specialized management of the private pension plan, this type of investment also has other advantages in relation to the payment of taxes levied on contributions or on profit.