Wonder how to start investing and where to invest in? In this article, I'll tell you how to diversify your portfolio to achieve high returns while maintaining the risk.
Many brokers allow you to begin investing for the cost of a single share or even a portion of it. Some firms also provide paper trading/test accounts, which allow you to practice buying and selling various assets such as stocks, cryptos, indexes, commodities, or ETFs using stock market simulators.
There is no one-size-fits-all solution for investing your money, so this guide will help you with defining your investment strategy. This guide will assist you in getting started with the appropriate tools and tactics.
For someone who is just getting started, investing might seem overwhelming, but to start investing, you simply need to download an app and start practicing.
Here is a table I created to diversify my investments into several different categories.
Below I will describe the meaning of each of the columns.
Location
Online - this includes any projects / places where we transfer money online, for example brokers and exchanges The Offline category includes deposits in banks, as well as investments in real estate
Region
The world is usually divided into 3 regions - America, Europe and Asia, respectively, when buying shares on the New York on the exchange, these investments should be attributed to the Americas. Likewise with buying an apartment in Spain, for rental, it will go to the European Region.
Country
With a breakdown by country, everything is simple, all investments are distributed according to the countries in which they made, be it stocks or real estate
Market
It is also worth dividing all your investments into different markets, i.e. not invest all of your money in stocks or cryptocurrencies, this will reduce risks during periods of crisis
Sector
When investing in stocks, you should buy stocks from different sectors, for the same reason, in the event of a drawdown of one from sectors, others tend to go up.
Industry
Each sector is divided into several industries and, as a rule, diversification by industry is even more a confusing process that allows you to even less reduce the risks of drawdown of your portfolio
Bank/Exchange/Broker
Even having split all investments into different regions, countries and markets, it would be foolish to keep all the money in one bank, therefore, it is advisable to divide them among several.
Cryptocurrencies
When investing in cryptocurrencies, it is worth deciding which of the options is most suitable for you based on the timing, risks and the need for manual intervention.
