When investing, you may not want to put all your eggs in one basket. When you invest in different things, you spread the risk and reduce the chance of monetary loss. Investors refer to this as ‘diversifying your portfolio’. Below are some examples of how to diversify.

Stocks

It’s worth investing some money into the stock market. Of course, you shouldn’t just invest in one single stock – if that company fails, you’ve lost all your money. You’re better off spreading your money among many different stocks. 

There are different ways to diversify. Some people like to choose a spread of companies from different industries. Others like to simply maintain a mix of high-risk and low-risk stocks. High-risk stocks tend to be companies that are newer and more volatile. Lower risk stocks tend to be bigger more established companies that have seen a steady return over the years. Most experts recommend a portfolio of about 20 to 30 stocks. 

Forex

Forex trading could also be worth getting involved in. This involves trading currencies. As with stocks, you shouldn’t just invest in a single currency pair – a few well-chosen pairs can help you to spread risk.

Just what types of pairs should you choose? It’s worth trying to incorporate a few strong stable currencies such as the US dollar, the Euro, the British Pound, and the Swiss Franc. At the same time, it could be worth trying a few more volatile currencies. This site explains how to become a forex trader and offers some useful tips on how to choose currency pairs. 

Cryptocurrency

You could also try investing in crypto. Cryptocurrency is a lot more volatile than other investments but can provide greater returns for those who invest wisely. A good way to invest wisely is to diversify.

Experts recommend investing 80% of your funds into established cryptocurrencies like Bitcoin and Ethereum, and 20% into less established cryptocurrencies. The more established cryptocurrencies, while still volatile, are less likely to experience big losses.

Savings and bonds

Savings and bonds are two of the most secure investment options. There’s practically no risk of loss, which is why it’s worth always having some money in a savings account or bond. That said, you may not want to put all of your money into stocks and bonds as any return you make will be relatively low. 

Tangible investments

Tangible investments are physical things that you can invest in such as real estate, collectibles, and gold. Adding a tangible investment to your portfolio can be worthwhile – a benefit of tangible investments is that they will always hold some value.