NZ Property Investor

HOW TO OPTIMISE YOUR INVESTMENT RISK THROUGH DIVERSIFICATION

‘Your own level of comfort with risk is important, regardless of your timeframe and investment mix’

Typical definitions of investment diversification focus on lowering risk by allocating money across a mix of asset classes, industries and geographies. The premise being that each would react differently to the same market events, thereby reducing your overall exposure to loss.

However, a potentially more progressive approach to diversification is to consider how it can be used not necessarily to reduce risk, but to optimise it within the context of your personal investment objectives.

Whether your investment portfolio comprises many different investment

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