Reduce Risk by Increasing Diversification

Diversification has always been a crucial element of portfolio management, and this has become increasingly evident in light of the market turmoil we have seen in recent years.  As we have seen, traditional asset classes generally move in the same direction simultaneously –  ie they were highly correlated.

Equities, commodities, real estate – all moved up in tandem together as the global economy expanded on cheap credit – and all plummeted in tandem in spectacular fashion as the markets crashed in 2008 and early 2009.  As a result, investors had few options to protect themselves against the downside.  Thus today, more than at any other time, there is a strong argument to add uncorrelated assets, such as managed forex accounts, to an investment portfolio.

As can be seen from the above chart, currencies maintain a very low correlation in relation all other asset classes - including equity markets, fixed income, commodities and real estate - thereby affording our clients greater overall diversification and reduced portfolio risk. Coupled with the fact that an investment in a currency fund represents a relatively low risk investment, it is clear to see why managed forex accounts are increasingly being seen as a vital tool in effective portfolio management techniques.
 
Callback
Any Questions?

Do you have any further questions about the Managed Forex Accounts? Please drop us a line, and we'll get back to you. Contact us

Free Newsletter

Sign up to our free newsletter, and receive all the latest managed forex news and updates.

Sign up here!

Diversify Your Portfolio With a Managed Forex Account Diversify Your Portfolio

An investment in managed forex can help diversify your portfolio and protect you from the volatility of the stock market. Read more

Risk DisclosureContact UsTerms & ConditionsOffshore BondsArticles