According to the Oxford Club, one of the single most important activities that an investor needs to do is diversify their portfolio. Considering that the Oxford club is the largest investor club in the world, those looking to invest smarter may want to take heed of their advice. Serving members of 130 countries, the Oxford Club provides relevant information to their members to help them make good investments and increase their wealth.
To The Oxford Club diversify means a couple of different things. One, investors should diversify by having multiple types of investments that they put their money into throughout the year. For instance, a commodities trader may not want to put all of his eggs in one basket. They may also want to put some funds in other types of investments, like stocks and bonds. While one investment type is lacking, the other could essentially pick up the financial slack. This is why it’s important to have different types of investments considering you never know when one industry may plummet.
Another way to diversify is by having investments of different sizes. A smart investor may have some small investments but also may have some larger investments like maybe a large commercial building. While the large investment may yield more income, it can also possibly yield more loss depending on how risky it is. Which leads to another type of diversity needed by any good investor, a mixture of very risky investments compared to some that are less risky. This keeps your portfolio even and leaves a little more room for error.
Another tip that the Oxford Club has is always knowing when it’s time to sell. Be careful not to hold your investments too long to where you actually lose money versus gain money, which is the point of investment. Last, the Oxford Club says to never pay too much for your investments and always cut your costs. One of the best ways to cut costs on your investment is to try to limit the amount of taxes you pay on it throughout the year.