FINANCE UPDATES – Nov 2019 – Diversifying your savings
Diversification is such a commonly-used term in relation to
savings and investments that it can sound like a buzzword,
but the basic idea behind it is simple enough.
It’s the practice of making a variety of investments in order to
reduce the overall risk of your portfolio.
Let’s say you put all of your savings into shares in one company.
If that company is successful, you’re likely to see high returns,
but if it fails you risk losing everything you put in.
Now let’s say you put some of your savings into a cash ISA,
some into bonds, and some into shares in multiple companies.
Finance Update – Diversifying your savings