Diversification is a vital element of investing wisely. It means spreading your money across a number of different investments – “not putting all your eggs in one basket”. You reduce the investment risk and increase your potential return by spreading your funds across a number of:

• investment types (asset classes – cash, fixed interest, property & shares);
• economic regions (local and overseas); and
• investment managers

Cash	Fixed Interest	Property	Shares

Investments move up and down in cycles. Spreading your risk across a diverse range of asset classes, economic regions, industries and investment managers means that you can share in the growth of one area of your portfolio asset while limiting your exposure to short-term dips in other areas.