Portfolio Risk Mitigation and Diversification


Investing is one of the best ways to build wealth and secure your and your family’s financial future. There are risks in investing, but one principle that can help guide smart decision making is diversification. The primary goal of diversification is to decrease the risks associated with investing by spreading your investments across multiple asset classes, while maintaining exposure to market growth. Here are some reasons why diversification is a terrific way to mitigate risk and support your long-term financial goals.

Protect Market Volatility

Minimize your portfolio’s drawdowns by investing in alternative assets like precious metals. Gold, silver, platinum and palladium act as defensive assets that tend to hold their value even in a downtrend market. Gold helps investors protect themselves against major portfolio fluctuation and can act as a vehicle for value storage. Inflation erodes the dollar’s spending power. Having precious metals in your possession can help to hedge against that loss of value.

Increase Risk-Adjusted Returns

Many investors incorporate diversification in their investment strategy to help improve a portfolio’s risk-adjusted return. A key component to designing a successful asset allocation strategy is to improve the efficiency of a portfolio. Allocating investments among various asset classes helps to balance the risk when one class is performing poorly. The factors that cause one asset class to falter may improve the return for another.

Make Investing More Fun

Increasing the level of control you have around your assets does not have to be complicated. For many, diversifying can help to make the process more enjoyable. Reduce equity exposure, take back control, and prepare your portfolio for market uncertainty.

Invest in Precious Metals

If you are interested in learning more about mitigating risk with diversification, contact us to talk about investments in gold and other precious metals. We can help you get started today.