Successful investing is about getting the right balance in your portfolio. This section will explain how you can 'diversify' to reduce risk and minimise exposure to any particular aspect of the market. We will also show you what kinds of thing you can invest in and the amount of risk involved; and keeping your investments on track.
With a wide range of investment types to choose from, how do you decide where to put your money?
Not all investments do well at the same time; this is because they react differently to world events, economical factors like interest rates, and business performances. Most experts recommend spreading your money over several different types of investments (e.g. stocks or 'equities', bonds, cash etc) to even out the risk. This strategy is called diversification and is really just putting in to practice that old saying "don't put all your eggs in one basket".
TD Direct Investing offers an extensive range of investment types to help you build a diversified portfolio.
Please note that while diversification can help reduce your portfolio to risk by dampening the impact of certain market conditions and low performers, it cannot guarantee profits or protect against losses.
TD online X-Ray tool can help you to decide whether you need to make an adjustment to keep your investment strategy on track. X-Ray is available to customers, log in to your account and go to Markets and Research/Investment Tools.
Maintaining your investment portfolio doesn't have to be difficult, but it is advisable to review the diversification of your portfolio periodically to ensure that it still meets your investment goals and tolerance to risk.
It is likely that some of your investments will grow faster than others and it may be necessary to rebalance your portfolio by cutting back on the high performers and putting more into the low performers to bring your portfolio back to your original asset 'mix'.