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Diversification tips to strengthen your portfolio

There are different types of investment portfolio available in the market. There are those that focus on certain promising industries, as well as those created for those just starting to go public. But regardless of their characteristics or style, there is a common factor that should be present in all: diversification. Thus, you can have control of risks and returns. To achieve a suitable variety, you can follow these tips:

Choose different funds and stocks for your portfolio

The main goal of diversification is to ensure that, if one asset is not performing in the same way as the rest, the others can compensate for this decline. Thus, people should consider holding titles from several companies, preferably in different industries or sectors. You can even choose various levels of risk and potential return until you have, on average, a balance that perfectly matches your investment needs.

Don’t leave out ETFs

There is more than one portfolio that focuses exclusively on company stocks to generate returns. But for certain investors, it can be too risky a strategy, even if relatively stable brands are chosen. In this sense, tools such as ETFs, listed investment funds, can be an attractive option to control risk. As they are pools of assets, they are positioned as a low-cost alternative to diversify.

Integrate alternative assets to your portfolio

Along with company stocks, there are other investment tools that can add to investors’ equity strategy. For example, cryptocurrencies. These have different characteristics than company titles, and can vary in both risk and return. However, precisely because they have different value dynamics, they could help create a much more complex and profitable collection of assets.

Of course, investing in all of these items can be difficult for investors, especially using traditional channels. And is that building a portfolio with an interesting diversity of assets requires visiting many markets, often with several intermediaries. In this sense, platforms like eToro are an attractive option. This, not only because it is available online, but also because it gives access to securities, titles and resources from around the world.

Create a portfolio tailored to your needs

eToro is a regulated entity, in Europe by the Cyprus Securities and Exchange Commission and in the UK by the FCA. Likewise, it is registered with the CNMV within the Investment Services Companies section of the European Economic Area in Free Service. It also has the Australian ASIC regulation. CopyPortfoliosTM is an investment management service provided by eToro Europe Ltd., which is authorized and regulated by the Cyprus Securities and Exchange Commission. Your capital is at risk. CopyPortfoliosTM are a portfolio management product. CopyPortfoliosTM should not be considered as an investment fund in the stock market, nor as a hedge fund. This content is for informational and outreach purposes only and should not be considered as investment advice or recommendation. Past performance is not an indication of future performance.