Diversify and always consider your investment as a whole

A diversification strategy will help you achieve more consistent returns over time and reduce your overall investment risk. The term correlation is used to describe how one type of investment behaves in relation to another. If two types of investments behave similarly, they are said to be positively correlated.

Managing risk

If they behave differently, they are negatively correlated. So, whether the market is bullish (rising) or bearish (falling), maintaining a diversified portfolio is essential to any long-term investment strategy. While markets can always have a bad day, week, month or even a bad year, history suggests investors are much less likely to suffer losses over longer periods.

During retirement

Investors should aim to keep a long-term perspective. When it comes to creating an investment portfolio to help you maintain your quality of life during retirement, it is essential that you diversify to help you achieve your desired returns while managing risk.

This means balancing the investments you have in your portfolio among different categories, classes and industries so that in a given economic situation they don’t all go up or go down together.