How To Build an Investment Portfolio
November 12 2021 - 05:23AM
NEWSBTC
Having a diversified portfolio is essential for any serious
investor. There is a good reason behind the popularity of the
phrase, “don’t put all your eggs in one basket” when it comes to
assets. One basket, in this case, would be equivalent to investing
in only one asset – and if the value of that one asset falls to
zero, the whole investment can be lost. Choosing to invest in
multiple assets is known as “diversification”. This can be done by
either investing in multiple asset classes or by investing in
multiple different assets within one asset class. Asset classes
differ from one another in the nature of the source of their value.
For instance, commodity funds invest in raw materials or primary
agricultural products, whereas Forex is a money market asset in
which foreign currencies are traded. In the event of one of the
assets failing, a diversified portfolio can help to prevent big
losses. You would have the ability to significantly offset the loss
of the falling asset if you had other investments. However, in
order for this to work effectively, the correlation between the
assets in a potential portfolio must be taken into account. An
everyday life example of correlation would be that during winter,
the sale of coats would go up. Therefore, cold weather and coat
sales are positively correlated. The occurrence of one and the
sales of the other respectively tend to move up and down together.
This is why when investing in multiple assets, the aim should be to
find assets that are negatively correlated, where asset returns do
not lose and gain value simultaneously. Taking such events, as well
as other details into consideration when investing in multiple
asset classes is tricky as it would usually require having
different accounts on different platforms, for different assets.
This is why Digital Financial Exchange – DIFX, was created.
Co-Founder and CEO of DIFX, Jeetu Kataria, is a lifelong
multi-asset trader and venture capitalist. Supported by an elite
team of leaders in the worlds of banking, technology, marketing and
fund management, DIFX is now a series of multi-asset trading tools
wherein “cryptocurrencies can be used to trade traditional assets
with the cross pairing between all assets.” Powered by the
MetaTrader5 platform, the DIFX ecosystem users can trade over 500
assets in cryptocurrencies, commodities, forex, options, and stock
CFDs. Some examples of MetaTrader5’s diverse trading pairs include
Bitcoin vs Silver, Bitcoin Cash vs Gold, Ripple vs Swiss Franc,
Litecoin vs Japanese Yen and Ethereum vs Ripple. The vastness and
complexity of building an investment portfolio become a lot more
manageable when it is possible to build a portfolio in a few clicks
or carry а whole investment portfolio in your pocket. The DIFX
Android and iOS App give users in-pocket access to a fully insured
cross-asset trading platform, as well as the fastest and most
secure cryptocurrency exchange with 24/7 support, high liquidity
and security. Learn more about DIFX at difx.io and download the
mobile application today by visiting https://linktr.ee/difx.io
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