Strategy - Diversification

Different investor embraces different types of investment strategy. One of the famous ones is Diversification. This strategy is to reduce or minimize the risk exposed to one investment. Some investors Diversify to achieve a “Balance” in their different types of investment, if 1 investment fails, other investments are still making profit.

You can diversify your investment in order to achieve “don’t put all your eggs in one basket”. You can diversify your investments by different market and/or different investment types.

For instance, Lee and John want to diversify their investments, therefore they choose to invest in the Unit Trusts below:

Customer#1: Lee

• Public China Select Fund (Aggressive Equity Fund)
• Public Global Balanced Fund (Balanced Fund with Conservative to Moderate Risk Profile)
• Public Money Market Fund (Money Market Fund with Conservative Risk Profile)

Customer #2: Mohammad

• Public Islamic Bond Fund (Bond Fund with Conservative Risk Profile)
• Public Global Select Fund (Aggressive Equity Fund)

There are, however, some investors believe that they should put all the eggs in one basket in order to FOCUS. It really depends on individual if you want to diversify or focus.

***Next: To buy and sell***