A well-diversified portfolio consists of an array of assets, from stocks to property, & precious metals. Here are some tips on diversifying.

What is a Well-Diversified Portfolio? Tips On Diversifying

GA News

The Spotlight

Newsdesk

Studies & research

When it comes to investing, diversification isn't just a buzzword. It's a strategic move that can make the difference between financial security and volatility.

No matter where you’re at in your investing journey, it’s good to get familiar with portfolio diversification. Ask any investor and they’ll tell you: this is the bedrock of any solid investment strategy.

Here, we’ll help you get to know portfolio diversification and how you can start applying it to help you manage investment risk and potentially maximise your returns.

Portfolio diversification is essentially the act of investing in a range of asset types. For example, as opposed to only investing in stocks, a diversified portfolio would consist of a mixture of stocks, bonds, property, and 

If you’re like us and you love a pie chart, here’s a visual example of a diversified portfolio just for you.

A pie chart representing an investment portfolio including stocks, bonds, gold, property, cash, and crypto

Why Should I Diversify My Investment Portfolio?

“Don’t put all your eggs in one basket?”

. Well, that is what portfolio diversification is really about.

It’s about spreading your risk across multiple investments, as opposed to putting everything in one place.

And having different kinds of assets is often more stable and, on average, brings higher long-term returns.

That’s mainly because different investment assets respond differently to market conditions. So having more than one type of asset reduces the risk of significant losses and increases the potential of overall value growth.

OK. So, how can I diversify my portfolio?

An investment portfolio divided between cash, precious metals and real estate assets

When it comes to diversifying your portfolio, there isn't a one-size-fits-all approach.

The right strategy for you will depend on your financial goals, risk tolerance, and general market conditions.

However, there are some popular strategies that you can build upon to create your diversified portfolio. Just bear in mind that you will likely need to tailor elements of each strategy to make them work for you.

Some popular diversification strategies include:

The simplest and most common portfolio diversification strategy is investing in different types of assets like stocks, bonds, real estate, and precious metals.

Each type of asset has its own risk and return profile, so by having a mix you reduce the impact of poor performance in just one area.

You can also diversify within an asset type. For example, in the stock market, you can invest in various sectors such as tech or healthcare. Or when investing in precious metals there is 

Each sector can be affected by market conditions differently. So by investing in more than one, you protect yourself.

Different regions of the world can have different economic cycles and experiences. By investing in various global markets, you're not relying solely on the well-being of one economy. If one market takes a hit, your investments in other regions might provide a cushion.

You can also take advantage of different VAT and tax rules in other countries. For example, there is no tax to pay in Switzerland if you invest in gold there.

Beyond traditional asset types, there are also investments like hedge funds, private equity, or real estate, that you can invest in.

These add a layer of diversification as they will be impacted by financial and market changes in a different way to your other assets.

Imagine your money is like a mix of fruits in a basket. Over time, some fruits might grow bigger (earn more) and others might shrink (earn less).

You'd want to rearrange (or rebalance) your fruits every so often to make sure no fruit takes up too much space or gets too small. Why? Because if one fruit goes bad, you don't want it to spoil the whole basket.

Keeping a balanced mix helps protect your basket (portfolio) overall. So, by adjusting, you ensure you're not putting all your bets on just one type of fruit.

Which portfolio diversification strategy works best?

People looking at graphs and a pie chart

The classic 60/40 portfolio has been the mainstay of investment strategy for decades.

That’s 60% higher risk, higher return assets such as some stocks, and 40% of lower risk and lower return assets such as precious metals.

But over the last few years, some major investment management companies like BlackRock are warning that the 60/40 portfolio no longer fits today’s changing markets.

That’s because recent factors, like the 2020 COVID-19 pandemic, caused global economic shifts that spurred market volatility. The cost of keeping the world’s economies afloat during lockdowns has meant inflation is driving prices higher and higher. Coupled with the fact that many people don’t have the income to make investments, stock prices have dropped.

This, in turn, has caused many investment firms and experts to believe that the traditional 60/40 approach might not be the best. Because, with market volatility, stocks rollercoaster, so relying on them for 60% of your portfolio can be a nail-biting ride.

Luckily, you’re not limited to just one diversification strategy and there are plenty you can peruse when choosing the right one for you.

These three portfolio diversification strategies reduce stock investments compared to the 60/40 portfolio, so you can worry less about market volatility:

 This strategy allocates 55% of your portfolio to higher risk, higher return assets such as stocks, and 35% to lower risk, lower return assets such as bonds and precious metals. The final 10% then goes towards real estate. Like the 60/40, it can help you to achieve higher returns over the long term, but it also comes with less risk than the 60/40 portfolio.

: This allocates 40% of your portfolio to stocks, 30% to bonds, and 30% to alternatives like precious metals. It’s a good compromise between risk and return and can help protect your portfolio against inflation.

: This allocates 30% of your portfolio to stocks, 30% to bonds, 30% to real estate, and 10% to alternatives such as gold and other precious metals. This is a more diversified approach and helps reduce your risk even further. This is a popular approach for those who are saving for retirement.

The best portfolio diversification strategy will depend on your unique circumstances and risk tolerance. 

Consider talking to a financial advisor for tailored advice.

A man trying to mitigate his investment portolio risk

However, here are some things you can think about when choosing a portfolio diversification strategy:

 Younger investors may be able to take on more risk, while older investors may prefer to reduce their risk.

: Your income will determine how much money you can invest.

What are you hoping to achieve with your investments? Are 

you saving for retirement, a down payment on a house, or something else?

 How much risk are you comfortable taking with your investments?

 portfolio diversification strategy, but looking into assets beyond stocks, like precious metals is a great place to start.

Even in the aftermath of COVID-19, precious metals have retained more value than other types of investments.

Traditionally, during inflationary periods, precious metals like gold and silver retain their value. Although the value of gold initially dropped when COVID-19 lockdowns temporarily halted gold mining, it rebounded to reach an all-time high in 2020. Since then, the value of gold has consistently remained at elevated levels.

A chart showing how the gold price has consistently gone up over the years between 1969 and September 1, 2023.

Whether you’re buying gold in Switzerland or buying up property in the UK, diversifying your portfolio is an important investment strategy. Doing it successfully can help you to manage risk and increase potential returns.

Success is all about balancing risk. For example, if you’re thinking of adding riskier assets such as cryptocurrencies to your portfolio, you should also consider balancing this risk with other safer and more stable assets, like gold and silver. That’s because investment assets like precious metals offer a historical hedge in periods of economic uncertainty, like COVID-19. This can offset the volatility in your other assets, like stocks, which will take more of a hit.

So, no matter how experienced you are as an investor, diversification is a smart way to add stability and growth opportunities. Start diversifying your portfolio with precious metals today.

A look at the strong changes in demand in the gold sector y-o-y.

A Shift in Gold Demand Trends

Good thing central banks can't print gold. 😉

21.9% Annual Inflation... and Counting

Despite slowing down, the frenzy around silver has kept prices up, and demand for physical bars and coins strong, while doubts over the state of the silver stocks emerge. Is Silver Setting the Stage for a Breakout?

Is Silver Setting the Stage for a Breakout?

We are thrilled to announce that our CEO Alessandro Soldati was invited for an open and lively discussion on a popular YouTube channel Frugalisme et Liberte Financiere.

How to Buy Physical Gold Online in 2022?

17/02/22: The European Central Bank could raise interest rates in 2022, the gold price goes up as tensions over Ukraine resurface, Switzerland lifts most Covid-19 restrictions. And more.

Weekly Digest: ECB Rate Hikes, Gold Up on Ukraine Tensions

Choosing between gold and silver: A comparison to help you decide which metal might be right for you.

Should You Buy Gold or Silver?

Reddit and the Wall Street Silver crowd are planning a new #Silversqueeze. With more coordination and hindsight, will they succeed in rising the silver price? 

#Silversqueeze 2.0?                         

The Federal Reserve’s inflation goals are getting risky and could cause the rate to overheat dangerously if they were to push it too hard.

The Fed’s Dangerous Game

Meet GOLD AVENUE CEO, Alessandro Soldati, in our first Q&A video session!

Q&A with our CEO - Alessandro Soldati

The Fed desperately wants higher inflation that would exceed its 2% target. Will the ECB follow the lead? It looks like it. 

Does the European Central Bank Want High Inflation?

24/02/22: Russia has launched a full-scale invasion of Ukraine, the S&P is in a correction for the first time since the 2020 Wall Street plunge, gold hits a 20-month high. And more. 

Weekly digest: Ukraine Crisis, Markets Shaken, Gold’s Up

Russia’s decision to remove the US dollar assets from its sovereign wealth fund and partially replace them by gold boosts the yellow metal’s importance as a strategic asset.

Russia's New Move on Gold

After yet another central bank starts considering negative interest rates, we’re taking a look at how unlimited debt can impact physical gold investment.

Is Unlimited Debt Good for Gold?

World markets have taken a hit as the Russian invasion of Ukraine spooked investors around the globe. Here’s what you can do right now to protect your investment portfolio and gold savings.

Ukraine-Russia Conflict: What Impact on Your Savings?

You probably noticed certain industries and communities aren’t bouncing back as quickly as others during times of recession or economic crisis. That’s what the K-shaped recovery is all about.

What the K-Shaped Recovery Means for Gold

03/03/22: Markets are on a wild rollercoaster ride, Eurozone inflation at a record high, Russia intensifies its invasion of Ukraine, gold proves itself as a safe haven. And more.

Weekly digest: inflation rising, Russia sanctions, gold gains

You want to start investing but you don't know where to start? Here is a beginner’s guide to investing.

How to Start Investing in 2023? Here's What You Need to Know

The #silversqueeze movement took the investment world by storm and has the potential of shaking up the silver market. Will it be here for the long term?

#silversqueeze

Here’s a rare sneak peek into one of the world’s biggest gold refineries. 

How Do You Make Gold Bars?

10/03/22: Gold and palladium hit a record high, oil records its worst day since November, Biden signs an executive order on crypto. And more. 

Weekly digest: Metals on the Rise, Oil Drops, Crypto Order

In 2021, central banks continued buying gold, with emerging countries stepping up as key net buyers. Do you wonder why? Here’s what you need to know.

Central Bank Gold Buying Explained

With inflation soaring in Europe and the U.S, learn how to navigate higher consumer prices from this great personal finance video from Sorelle Amore.

5 Ways to Protect Your Wealth From Inflation

17/03/22: The Fed has raised interest rates for the 1st time since 2018, one of Brazil’s biggest funds goes for gold, E.U.'s rethinking gas supplies. And more.

Weekly Digest: Fed’s 1st Rate Hike, Gold in Demand

After Russia’s invasion of Ukraine, investors rushed to gold, the world’s oldest safe-haven asset, pushing its price to a new record. Why did this happen? Here’s what you need to know. 

Investor Gold Demand is Booming Right Now: Here's Why 

On August 15, 1971, U.S. President Richard Nixon possibly made the biggest monetary error in history. A video from Libre & Riche will tell you why.

All You Need to Know About the World’s Greatest Monetary Catastrophe

24/07/22: The U.K. hit by the worst cost-of-living crisis in decades, Powell finally admits inflation is “much too high”, European stocks drop. And more.

Weekly Digest: Cost of Living Crisis, Inflation Problem

The U.S. Federal Reserve has announced its first interest rate hike since 2018. What could this mean for the gold price? Here’s what you need to know. 

How Interest Rate Hikes Affect the Gold Price

31/03/22: European inflation soars to new heights, Russia resumes gold purchases, no breakthrough seen in Ukraine war despite renewed peace talks. And more. 

Weekly Digest: EU Inflation Runs Hot, Ukraine Peace Talks

It seems that the ongoing US presidential election has not changed the situation in the gold market so far as the macro backdrop remains quite favorable to the yellow metal.

Trump + Biden = Gold?

Do you want to buy gold bars but are not sure where to start? Here’s what you need to know to build your precious metals portfolio in a smart way.

How Do You Buy Physical Gold Bars? 

The backdrop of global inflation in the U.S. and Europe was already worrying. Now, Russia’s invasion of Ukraine is making the situation even worse, including sending gas prices soaring to record levels. Here’s what you need to know.

Here’s How Rising Gas Prices and Inflation Fuel Each Other

07/04/22: More and more people are worried about rising consumer prices, experts think the U.S. recession is inevitable, cryptocurrencies are facing some privacy issues. And more.

Weekly Digest: Inflation Worries, U.S. Recession

It looks like stagflation could be here soon. Here’s what you need to know to understand the economic phenomenon that stifled growth through the 1970s.

What Is Stagflation and Why Should We Worry About It?

14/4/22: U.S. inflation hit 8.5% in March, the highest since 1981, EU ban on Russian gas could spark a sharp recession in Germany, Ukraine peace talks “at a dead end.” And more.

Weekly Digest: U.S. Inflation at 40-Year High, German Recession Risk 

Leading world banks say we should get ready for a new recession shock. What does it mean exactly, and what investments might be the best place to stash your hard-earned money?

Recession Risk is Rising, Economists Say. Here's What It Means for Investors

21/04/2022: The IMF cuts its global economic growth forecast, UN says the war in Ukraine could create a global food crisis “beyond anything seen since World War II,” Macron and Le Pen fight for the presidency. And more.

Weekly Digest: IMF Cuts Growth Forecast, Hunger Threat

If you are a parent, you probably want to find the best way to set your kids up for financial success. Here’s how your gold savings will help you start building their lifelong wealth.

3 Ways Gold Savings Can Benefit Your Children and Family

Easy is always right. Especially when it comes to buying precious metals. If you still don’t know what’s the easiest way to buy gold, you’re in the right place.

The Easiest Way to Buy Gold and Precious Metals

28/4/22: Russia halts gas supplies to Poland and Bulgaria, the Fed is set for more aggressive rate hikes to tame inflation, Musk seals the deal to buy Twitter. And more.

Weekly Digest: Russia’s Gas Cutoff, Musk’s Twitter Deal

If your children are the lucky ones to get a hoard of gold as an inheritance, there are 4 things you should do before passing it on to them.

4 Things to Remember When Buying Gold for Your Children

04/05/22: The Fed is set to fight inflation with the fastest rate hikes in decades, Fitch trims China’s 2022 growth forecast amid Covid-19 lockdowns, two Argentinian banks will allow crypto trading. And more.

Weekly Digest: Fed Rate Hike, Cuts to China’s Growth Forecast 

Here are the 4 handy tips you can immediately put into practice when buying physical gold for the first time.

How Do You Buy Gold? A Beginner’s Guide

Swissmint made history as they issued their first-ever 50-franc Vreneli gold coin on May 11, 2022, making a very special coin even more popular in Switzerland and beyond.

Swissmint Issues a New Limited-Edition Vreneli Coin

12/05/22: U.S. inflation stays at a 40-year high, defying expectations of a bigger drop, crypto and stocks fall, reacting to the U.S. inflation data. And more.

Weekly Digest: U.S. Inflation, Stocks, Crypto Crash

The end of Bretton Woods seems to be an essential reason behind the widening of the productivity-pay gap that reveals gold's influence as a source of stability.

What is the Productivity–Pay Gap?

A quick overview of the performance of gold versus some of the major commodities for the first half of 2020.

🔥 Gold VS Commodities 🔥

You read in the press that persistently high inflation has finally peaked and should be going down soon. But the latest CPI numbers show it might not be entirely true. Here’s why.

Has Inflation Peaked? Here's What You Need to Know to Understand Inflation

19/05/22: U.S. stocks post the biggest daily drop in almost two years, Sri Lanka default hints at troubles ahead for developing nations, E.U. slashes growth forecast. And more.

Weekly Digest: Dow Tumbles, Food Inflation Getting Worse

Since the start of 2022, the stock market has been on a wild ride, while gold was close to hitting a new record high in March. Which has performed better so far? We guess you already know.🙃

Gold Price Vs. Stock Market: 2022 Edition

While the Fed is taking a dovish stance, investors are fearing a real rise in inflation in the near future.

Is the Fed Moving Too Slow to Counter Inflation?

25/05/2022: U.S. stocks slumped again amid economic data, the global food crisis risks causing a “messy” migration in Europe, Bitcoin could fall to $8,000. And more.

Weekly Digest: Stocks Slump, ‘Messy’ Migration Risk in Europe

Have you been thinking of investing in platinum bars and coins? Here’s what you need to know about one of the world’s rarest precious metals.

Investing in Platinum: A Beginner’s Guide

02/06/22: The Eurozone inflation hits a new record high, JPMorgan Chase CEO warns of the economic hurricane, EU leaders agree to ban most Russian crude imports. And more. 

Weekly Digest: Eurozone Inflation, Economic Hurricane

09/06/22: The OECD has lowered its growth forecast for this year, Eurozone inflation is expected to peak, U.K. economy is facing stagnation. And more.

Weekly Digest: OECD Cuts Growth Forecast, EU Inflation to Peak

Central banks are rushing to raise interest rates to tackle rising consumer prices in Europe. There are a few things we can learn from them about fighting inflation.

How to Fight Inflation? The Central Bank Edition 

Thanks to GOLD AVENUE, Tibo InShape was able to enter the famous gold refinery MKS PAMP. Watch the video and follow Tibo in his discovery of gold!

Tibo InShape & GOLD AVENUE: visit of a gold refinery in Switzerland!

16/06/22: Fed announced a historic rate hike, a U.S. recession is looming, bitcoin is plunging, U.K. economy is shrinking, China’s contact with aliens. And more. 

Weekly Digest: Big Fed Hike, Recession Fears, Gold Could Soar

GOLD AVENUE’s CEO Alessandro Soldati was selected by Bilan magazine as one of French-speaking Switzerland's most promising young entrepreneurs.

Bilan Chooses GOLD AVENUE Among Switzerland’s Top Young Startups

If you are considering buying silver bars and coins, there are a few things you need to know first about one of the world’s most valuable and accessible precious metals.

Investing in Silver: A Beginner’s Guide

Country-specific guides to understand gold as an investment in 2021 from the World Gold Council.

The relevance of gold as a strategic asset: 2021

Famous precious metal skeptic buys gold as a hedge against accelerating inflation which he says is “reminiscent of the 1970s”.

Lifelong Gold Skeptic Makes Major U-Turn

23/06/22: The stock market dropped as recession fears grow, UK inflation hits a new 40-year high, Bitcoin could plunge to a low of $13,000. And more.

Weekly Digest: Stock Rally Fizzles, Recession Risk

While stocks and bitcoin went down sharply due to rising inflation and uncertain economic outlook, gold has retained its value, exactly when investors and savers needed it. 

Bitcoin, stocks, gold: What is the best investment today?

29/06/22: Morgan Stanley sees a mild recession coming to the Eurozone this year, G7 countries agree to ban gold imports from Russia, German inflation eases. And more. 

Weekly Digest: Eurozone Recession, Ban on Russian Gold

What does the future hold for gold? Here are the 4 trends that could make the yellow metal shine in the nearest future.

Is the price of gold going up next year? 4 main drivers explained

07/07/2022: Gold drops over 2% in a selloff sparked by a strong dollar, U.K.'s Johnson is expected to step down, higher interest rates are unlikely to solve the inflation problem. And more. 

Weekly Digest: Gold Inches Down, Johnson to Resign 

A gold hunt story that captivated thousands and inspired a decade-long obsession with the famous Forrest Fenn treasure.

The Mysterious Hunt for Forrest Fenn's Gold Treasure

14/07/22: U.S. inflation accelerates to 9.1%, Europe is on high alert over Russia’s gas squeeze, NASA reveals the most detailed pictures of deep space ever taken. And more.