How can I help reduce my level of risk?

Diversification – don't put all your eggs in one basket

Spreading your money across various companies and sectors can help reduce the overall level of risk. Be careful however not to spread yourself too thinly, as you may have a hard time keeping up with all your investments if you have too many.

Mix aggressive and defensive investment strategies

Another way to achieve diversification is to mix aggressive and defensive investment strategies.

An aggressive investment strategy can help you achieve maximum return by building a portfolio that bears a high amount of risk often over a relatively long period.

A defensive strategy is a method of portfolio management aimed at minimising risk. Money is invested in shares that are less volatile than average but typically offer a much lower return on the investment.

Funds

Unit Trusts and OEICS and Exchange Traded Funds are good ways of diversifying without increasing the number of individual holdings.

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Investment types explained

Learn about the common investment types available to you through The Share Centre.

investments

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