Strategies for Effective Diversification
Effective diversification requires more than just randomly selecting different assets. 반도체장비 관련주
It involves strategic planning and consideration of how different investments interact with each other.
Assessing Correlation
A key aspect of diversification is choosing investments that are not highly correlated with each other.
Correlation measures how investments move in relation to one another.
Ideally, in a diversified portfolio, when some investments are down, others will be up, thereby balancing the performance of the portfolio.
Risk/Reward Balance
Diversification also involves balancing the risk and reward by mixing different types of investments.
For example, bonds traditionally are less risky and provide lower returns compared to stocks, but including both can stabilize the portfolio returns.