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Your investment portfolio may need more diversification

Analysis

The current situation and the still-high inflation necessitate the search for various ways of allocating one's financial resources so that they retain their purchasing power to the greatest possible extent, according to a report by the Warsaw Business Journal.

The strategy remains to diversify the portfolio and combine different asset classes. It allows you to limit the risk of losing or freezing all capital.

"The war in Ukraine has brought a lot of uncertainty and violent reactions to the financial markets – and not only to them. We are already feeling its effects, and currently, we are not able to predict what will happen in a week. Therefore, it is difficult for us to define how this conflict will translate into economic life in Poland or the exchange rate in the long run, so investors began to look for ways to safely allocate their capital. One of them is to buy investment gold," Aleksander Pawlak, president of the management board, Tavex, pointed out.

Therefore, it is worth knowing that proper diversification allows you to limit financial losses in a situation where one component of the portfolio fails – as a rule, the remaining ones should compensate for the loss incurred. In times of many unknowns on the markets, it is worth investing some of your savings in safe asset classes.

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