Godmind Knowledge House
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The weighting of the various asset categories that make up a portfolio is one of the most important factors in the successful implementation of any investment strategy. Spreading risk among various asset classes is a classic way of increasing the security of a portfolio. The rule of thumb is that, overall risk of a portfolio is reduced as the number of different securities held in different classes in a given market is increased. We also keenly manage to avoid over-diversification, as spreading too thin dilutes the value of diversification |
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| Asset allocation determines the investment returns you achieve because of different asset classes — equity, debt and money market — each asset class react differently to changes in the financial markets and to broader economic conditions. For example, a market that produces strong equity returns may cause debt returns to slump, and vice versa. But, if you spread your investments across different asset classes, you may be able to limit, or offset, potential losses in one asset class with stable values, or even gains, in another. |
| Choosing a particular asset classes is the first step, where you start your financial planning process with your Godmind advisors. |