Diversification

How can Diversification Help you?

Diversification is an important mean to manage risk. But, it does not guarantee against a loss. The key is to identify investments that perform different under various market conditions. It will be diversified between bonds, stocks and cash alternatives. How diversification works For an instance, say a stock portfolio included a mechanics company, a car manufacturer and a diesel service firm. Here, even though the portfolio has spread risks it may not be considered as a good diversified portfolio as all of them are connected to one Mechanical industry. So, switch to different portfolios such as a mechanics company, a computer company and a drug manufacturer. The concept of diversification is one reason as to why mutual funds are so popular among the investors. Ways to diversify your invest...

How Do You Choose The Right Mutual Fund?

  Saving and Investment for future security is at most important for each and every individual. For several people, busy lifestyle and lack of proper information might create a problem in selecting the right investment product. Mutual funds help you to get out of this hindrance. Mutual funds provide skilled investment management for people at a reasonable value. Here are a few tips for selecting mutual funds: Fund house: You need to choose a fund house on which you’ve got enough faith to invest your money and not adjust in a scheme of your choice. Identify fund houses that have a powerful presence within the financial world and provide funds that have consistent record.   Achieve goals of investment: Investments are made in such a way that it makes sure your savings enhance your ...

Inflation And Its Effects On Investments

A penny saved is a penny earned. But thanks to inflation, over time, the value of the penny saved could be much less than when it was earned. One cannot ignore the corrosive impact of rising prices on investments. Understanding inflation is crucial to investing because inflation can reduce the value of investment returns. Inflation affects all aspects of the economy, from consumer spending, business investment and employment rates to government programs, tax policies, and interest rates. WHAT IS INFLATION? Inflation is a sustained rise in overall price levels. Moderate inflation is associated with economic growth, while high inflation can signal an overheated economy. HOW DOES INFLATION AFFECT INVESTMENT RETURNS?  Inflation poses a “stealth” threat to investors because it chips away at rea...

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