Each week we hear the stories of the latest risk to hit the market, or the rise of another tech-based stock, all of which can be confusing when all we want is a return when investing our money.
Asking what the suitable investment is to buy at any moment in time is difficult, so you most probably will receive the common statement “Diversification is the key to minimizing risk.”
It is actually the best way to approach all your investments, and it allows you to stay balanced in risk, balanced in growth and balanced in a downturn.
Sometimes you don’t just want the standard approach, this is where Corestone has its satellite approach at hand. So first, we look at the majority of what you do as core fundamentals in investing. We then leave you room to make some of your own choices, where you might want to own Tesla, or Bitcoin, even a gold streaming fund that can pay an income?
All of these are known to us as Satellite holdings, and they require a little more thought and must be no more than 5 to 10% of your overall portfolio. This way, you can limit any downside, but at least enjoy some upside to the choices you make.
Gold, gold mining and ETF’s or mutual funds in gold are some of the ways you can diversify your portfolio. It has long been a hedge against adverse markets, and for most, it is an alternative in case inflation spirals.
We see it as good common sense to have diversification in what you Invest in. Never too much in one thing and always considering risk.
Core holdings will usually be liquid holdings that you can access within days, and satellite holdings will sometimes take longer or have a given timeline until maturity; this is why we always stipulate that they hold smaller percentages of your portfolio.
If you want to diversify and look at an alternative, please call us and get in touch because at Corestone, informed decisions are the best decisions.