Diversification: Your ticket to investing with peace of mind.

Dear Smart Investors,

Have you ever worried about your investments? Asset volatility can cause one to panic, often leading to poor investment decisions. However, the good news is that there is a great solution: Diversification. It is one of the most important principles in investing, but what exactly does diversification mean? Read on to find out and to learn why AXA Mansard Investments advocates diversification so strongly.

What Exactly Does It Mean to “Diversify” My Portfolio?

Diversifying your portfolio means you incorporate a variety of asset and investment types into your portfolio. In simple terms, do not put all your eggs into one basket. Diversification helps you reduce risk such that when one asset/asset class does badly, your entire portfolio is not as badly impacted.

How Do I Diversify My Portfolio?

There are two ways to diversify your portfolio: across asset classes and within asset classes. When you diversify across asset classes, you spread your investments across multiple types of assets. An example is s a balanced portfolio that includes asset classes such as Bonds, Money Market Instruments, and Equities. When you diversify within an asset class, you spread your investments across many investments within a specific type of asset. An example is our Equity Income Fund which includes a wide array of stocks. Its year-to-date performance is 7.25% as of Feb 3, 2022.

Why is it Important to Diversify Your Portfolio?

It is essential to diversify your portfolio to limit excessive concentration so that no single investment can hurt you significantly. By owning various amounts of each asset/asset class, you end up with a weighted average of the returns. This allows you achieve your overall returns without being too reliant on any individual investment.

Protecting your assets, smoothening out volatility and having peace of mind are all benefits of diversification that cannot be overstated. It is why at AXA Mansard Investments we give you all the tools and advice that help you build an optimally diversified portfolio that will also stand the test of time. Reach out today to discuss the easy steps towards diversifying your portfolio.

A weighted average is an average where some values weigh or contribute more than others. Using a weighted average gives a more accurate value than the normal average alone