Unlimited Opportunities
Unrestricted access to all major markets and asset classes is key to the health and growth of any portfolio. As opportunities increase, investors can efficiently diversify their portfolio and reduce the correlation between their investments. Sound complicated? It's not.
“Diversification” simply reflects the old adage, “don’t put all your eggs in one basket.” The simplest form of diversification is to invest using a collective investment, like a mutual fund, ETF, unit trust, or hedge fund. Unlike buying stock in an individual company, a collective investment is structured so investors can access multiple opportunities within a single investment. For example, a global equity fund might hold 50 or more companies at any one time. When investors buy the fund, they are purchasing tiny amounts of each company within the fund. Doing so enables investors to profit from the overall growth of the companies in the fund. And if any of the companies in the fund under-perform, the impact on the investor’s total portfolio is minimal because their exposure to each individual company is limited.
Another way for investors to diversify is to think globally. At any given time, some countries are experiencing economic growth, while others are contracting. Putting too much investment emphasis on any single country can lead to problems during periods of economic contraction. Instead, investors should spread their money across both emerging and established economies to create a suitable balance of growth and stability.
In investing, correlation refers to a statistical measure of how two markets or securities move in relation to one another. The advantage of having access to multiple markets and asset classes is that not all investments are perfectly correlated. For example, when equity markets are falling, bond markets are often rising. By spreading their investments across different asset classes (ie equity funds, real estate, sovereign & corporate bonds, oil, grains, etc) in different countries investors are able to achieve steadier, more efficient growth in their portfolios.
If you would like more information about a solution perfect for you, register using the form on the top left of the page. Objective Trading is happy to work with investors of all sizes and circumstances. Our clients range from twenty year old new investors with a small amount of money each month; to large multi-national corporations with millions to invest. Consultations are free of charge.
