Diversification is the Key

I practice what I preach and I preach diversification. The answer to keeping your financial head above water in this unpredictable market is all about diversification. That doesn't mean to spread your investment opportunities simply over a number of stocks or within a few commercial sectors. It means to broaden your investment opportunities over a wide variety of investment vehicles. What you ultimately invest in is entirely up to you but you must always be sure that you are involved in a number of investment mediums.

For instance, while a certain amount of your portfolio will, no doubt, be invested in the equity market, you should also be involved in other areas of opportunity like commodities, options, bonds, real estate, and you should also consider the Forex (foreign exchange) market. The Forex offers you another method of diversifying your investment strategy to protect your financial future. I advise you to consider the potential benefits of the Forex and invite you to learn all you can about this unique method of investing. One way to learn is to get a copy of my best selling book, Forex Made Easy...6 Ways to Trade the Dollar. I wrote the book to be very investor-friendly and it will help you understand the Forex market and how to trade it. It's actually very simple and that's why I like it so much. The way I trade the currency markets only involves the U.S. dollar against six other major world currencies. That's it! Not 40,000 or more stocks or mutual funds...just six currencies! I like that kind of simplicity.

Plus, if you are considering investing in the stock markets, you might want to consider issues that offer dividends with yields that exceed the 2.5% mark. That's probably much better than yield you can get at your local bank. Check out companies that are showing brisk growth in such industries like the financial, energy or consumer sectors. Just do your homework and you'll find something that will fit the mold and desired direction of your portfolio.

Determine what types of investments make you most comfortable and which investments make you uneasy. If you have trouble sleeping at night because you're worried about your investments then you shouldn't be there. Educate yourself daily through various media sources available to you; books, magazines, the Internet, television and radio. Go to workshops and perhaps consider taking a class at the local college. Always practice trading on paper before you invest any of your hard earned dollars in anything you are not familiar with.

Listen, these are some extremely volatile days. It seems like the financial markets have tried to maintain some kind of balance but recently this hasn't been all that successful on a global basis. Political rhetoric, deep concerns about the world's economy, the growing federal budget deficit, and the daily fears of terrorism around the world has taken its toll on all of us over the past couple of years but now is the time to rebuild. You should always keep in mind that no matter what the Dow is doing, no matter how the NASDAQ is trading, there are always investment opportunities that are increasing in value. Just remember to always practice the one method of cutting the odds of losing your valuable investment dollars. Assure that your portfolio is as diversified as possible.


James Dicks has been an educator on the subject of Real Estate, Stocks, Options, the Foreign Exchange Market and empowering investors to handle their own investments. James has authored numerous financial books including his most recent book Forext Trading Secrets published by McGraw-Hill as well as FOREX Made Easy Six Ways to Trade the Dollar and Operation Financial Freedom.

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