Ways to diversify Plan your investments well and you’ll also manage your risk well. and manage Even if you’ve chosen a portfolio that suits your level of risk and needs, you should review your level of risk and investment goals on a regular basis. your risk Diversification is the key to minimising your risk. Ways to minimise risk Diversification Investing in funds Quite simply, don’t put all your eggs in one basket. By investing in a fund rather than an individual A diversified portfolio that includes higher risk company, your money is spread across shares or bonds investments, such as equities, as well as lower risk from many different companies, sectors and, in some investments, such as bonds, will help to manage and cases, regions. The risk to the overall investment is lower your risk. This is because if the equities in your reduced since you are not relying on the fortunes of a portfolio are volatile and dramatically decrease in value, single entity. If one company in the fund underperforms, the fixed interest from your bonds should still give you the others could cushion the blow. a regular income and help to give your investment an The cost of investing in a fund can often be less than overall consistent level of performance. buying shares or bonds one at a time. This is because the costs are generally lower, the larger the sums involved. Also, an experienced fund manager can select and manage those assets on your behalf. 12