Diversifying your portfolio is job #1

Investing
Saxo Bank

Less risk, more returns. How can you make your portfolio deliver?

When you build a portfolio, it’s normal to invest in what you know best – a few tech names you like or familiar stocks from your home market. But while that might give you a portfolio that feels comfortable, it’s far from bullet-proof. Why? Because it lacks one key element: diversification.

When you diversify your portfolio, you’re spreading your investment money across different assets, sectors, industries or regions. That means your total investment nest egg isn’t weighted too heavily in one thing – so, if your favourite tech stocks suddenly get volatile or your home market takes a dramatic downturn, your portfolio as a whole won’t be so vulnerable. 

Flex your investing muscles

Less risk is just one benefit of diversifying your portfolio. Casting your investing net wider – across the globe if possible – also means you’ll be able to catch more opportunities in the financial markets. 

Remember the skyrocketing Chinese stock markets in 2014-15? Or the rally in crude oil prices early in 2019? By flexing your investing muscles and adding a variety of assets, you’ll not only keep your portfolio more balanced, you’ll also be better placed to find new opportunities around the globe.

It’s all relative

Once you’ve started diversifying your investments, a little fine-tuning will be in order. Stocks, bonds and other assets such as oil or gold don’t perform in the same way or move with the same trends – and that’s good for your portfolio. So, it’s important not only to  invest in different assets, but in assets with low correlation that won’t move up and down in tandem.

For instance, “safe haven” assets such as gold and bonds tend to rise in value when riskier assets like stocks decline. If you have both types of assets in your portfolio, their complementary movements can help keep your portfolio on a more even keel when volatility strikes. And it will.

Be careful out there

From flash crashes to interest rate announcements, today’s markets can move in a moment. A single headline or tweet can change the state of play in global markets or jolt an entire sector (no, not even your tech stocks are invincible).

Your job as an investor is to create a portfolio that can withstand whatever the markets throw at it. Diversifying is always job 1 – with a healthy mix of assets and global markets, your portfolio can deliver less risk and more opportunities, putting you on the road to your investing goals.


Explore our investment solutions

Diversify with one click

Exchange Traded Funds (ETFs) are all about diversification. We have 3,000+ ETFs to choose from, so you can access a vast range of global investments, instantly.

Explore ETFs

 

Experts at your service 

With SaxoSelect portfolios, you’ll gain exposure to different asset classes, sectors and countries, while having your investments managed by the experts.

Discover SaxoSelect

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.