As the saying goes, "Don't put all your eggs in the same basket." Many people follow this golden rule in investment. However, many novice investors can easily fall into the misunderstanding of risk diversification, such as multiple Buying a few stocks or funds is diversifying risks. In fact, true diversification also requires certain strategies, and different investment products will have different methods and logics.

How to diversify investment risks?

1

Rational allocation of major asset categories

Many investors usually think of risk diversification as buying dozens of stocks or dozens of funds. If this one doesn't go up, that one goes up. In fact, in a single market, no matter how many different products we buy, they still have the characteristics of this market and will be affected by the overall market environment.

For example, stocks will be affected by the broader market. When the stock market enters a bull market, most stocks will rise under the impact of market frenzy. When the overall stock market is not doing well, few stocks can rise sharply against the trend.

To truly diversify risks and achieve a reasonable allocation of assets, we need to carry out it among asset categories with different risk characteristics. Especially when the market situation is unclear, this allows us to maximize our Don't miss out on big gains in a certain asset class. The less correlated assets are allocated, the better the effect, because different types of assets can hedge risks, and we can divide them into these categories:

1 Real estate, Reits

2 Stocks, stock funds, mixed funds

3 Futures, options

4 Bonds, debt funds

5 Deposits, currency funds

6 Gold, precious metals

7 Foreign exchange

Various assets have different risk and return characteristics, but no matter what the macro environment is, there are generally certain assets that can benefit from them. We take advantage of the low correlation between the returns of different assets and carry out multi-asset allocation, which helps reduce the fluctuation of the portfolio's net value and achieve long-term stable and balanced returns.

For ordinary investors, the more common one is a balanced portfolio of stock and bond investments, plus allocation of common investment products such as gold and real estate.

II

Stock risk diversification

1 Fund diversification

Fund diversification is easy to understand, that is, do not put all your funds in For investors with poor stock picking skills, betting on the same stock will greatly increase the risk.

Especially when we have a large amount of cash that cannot be lost, it is best to adopt a diversified investment method to reduce risks. Even if there are unforeseen circumstances, "the east is not bright and the west is bright", It will not be "annihilated".

But if you have a sum of money that is not used temporarily and the amount is not large, and we can bear the losses it may cause, then we can choose to concentrate the funds to invest in a stock. For example, if you only have a few thousand yuan of spare money on hand and spread it out to buy a few stocks, it will not be very cost-effective in terms of handling fees.

2 Industry fragmentation

In the A-share market, there is an obvious pattern, that is, sector rotation, so when we invest in stocks, we are not just choosing different companies. Diversify your investments and also pay attention to whether they are all in the same industry or adjacent industries.

Because in the same economic environment, companies in the same industry and adjacent industries may be affected by the same impact, and the overall general trend is similar. If the investment choices are different in the same industry or adjacent industries, Enterprises also fail to achieve the purpose of diversifying risks.

3 Stock types are dispersed

There are countless stocks in the market. People usually divide them into several major categories based on different characteristics, such as common growth stocks and value stocks. stocks, blue chip stocks, white horse stocks, etc. Among these categories, there is often rotation.

4 Time Dispersion

On the whole, the stock market will have a bull market and a bear market, and there will also be short bull and short bear periods. In the A-share market, there has long been a saying that bulls are short and bears are long, so for long-term investors, our trading operations can be dispersed in time. Excessive concentration on one time period and frequent operations will often cause The transaction fees are relatively high, but the spread income is not obvious.

Three

Fund risk diversification

1 Fund asset allocation in major categories

Funds mainly include currency funds, Bond funds, hybrid funds and equity funds. Our allocation in these categories is actually a large category allocation in fund investment.

2 Pay attention to the phenomenon of repeated positions

Unlike stocks, funds themselves are a type of diversified investment. A stock fund contains dozens or even hundreds of stocks. So buying a fund is equivalent to diversifying your investment.

If we buy a few, a dozen, or even dozens of funds, and there are many stocks with repeated positions, then we can only say that we are doing useless work and have not achieved real results. Spread the risk.

3 Distinguish between industries, investment styles, and heavy positions

In order to avoid large-scale repeated positions, we can make risk assessments from the perspective of different investment styles of funds and different industries in which they invest. of dispersion.

In addition, we can also pay attention to the ten largest holdings of the fund. This will be displayed in the fund's information. Although there will be a certain lag, the general position situation can still be improved. distinguish.

4 Fixed investment smoothes risks

Fixed investment, as one of several common methods of fund investment, can smooth risks to a certain extent. In fact, this is also a way to spread risks over time. However, it should be noted that fixed investment can continue to perform subdivided operations, and there are many techniques in it. It is not that you can benefit from fixed investment without thinking.

Furthermore, we must know that although fund fixed investment is a long-term investment, it also has a time limit. We must learn to stop profits at the appropriate position. Generally speaking, the best time period for our investment is to take the bull market and the bear market as the node, especially since my country's stock market is still in a short-term bullish state, so we must find the right opportunity to take profits when the bull market comes.