Diversification is one of the most important strategies in investing and managing risk. It can increase your returns while also reducing your exposure to falling markets.
Don’t put your eggs in one basket
In short, the risk of holding just one fund is greater than holding a range of funds within a portfolio or pension. By using a range of funds, the investor is able to spread his or her exposure across a variety of asset classes and geographical sectors, not to mention fund groups and fund manager’s expertise. This diversification allows investors to look at many more asset classes than would otherwise be possible. Indeed, there are asset classes that, on their own would be considered high risk but when correctly positioned within a portfolio, this risk is counterbalanced with lower risk assets.
By setting up the investment or pension on the right platform and paying attention to charging structures, it is possible to create this diversified portfolio at very low cost, and then manage it going forwards within our Ongoing Servicing fee.