2019 might very well represent the year that serves to redefine the term “business as usual”. This is why successful entrepreneurs are already planning ahead for any possible contingencies.
One of the best ways to achieve a higher degree of financial stability is to fully embrace the role of diversification within a portfolio. What are some expert suggestions and why might they represent ideal solutions throughout 2019?
Commodities have always been an attractive sector due to their ability to be used as safe havens during times of market uncertainty. Having said this, a growing number of analysts are predicting a very bullish year ahead. Diversifying a portion of your holding into commodities such as precious metals could represent an additional source of liquidity.
In terms of liquidity, Forex trades should remain at the top of your list. The relationships between currency pairs will change frequently and as a result, it is always possible to reap short-term profits. Forex positions are also excellent if you wish to use the power of margin trading in order to increase your overall return on investment.
As always, it is best to learn the basic principles behind such market movements if you hope to leverage their mechanics to your success. CMC Markets has put together a number of detailed Forex trading examples in order to better appreciate which strategies to employ at specific times.
Long-term positions are the direct antitheses of the Forex trading methodology mentioned above. The main advantage behind long-term holdings (such as blue-chip companies) is that their prices tend to be more predictable over time. Many are also able to supply dividends; a powerful means to secure steady income on a quarterly basis. Blue-chip stocks are still flexible enough that they can always be sold in the event that you are required to quickly raise additional capital.
Keep Geography in Mind
One lesser-known way to diversify your holdings is to take into account different regions of the world. This essentially arises from the fact that certain geographical areas may undergo greater degrees of economic change than others. For instance, only owning shares listed and trading out of the United States marketplace could be a dangerous proposition if this nation fell into a recession in 2019.
Strive to possess holdings that represent a wide geographical base in order to decrease the chances that the aggregate value of your portfolio will fall.
One of the mistakes made by novice traders is that they fail to monitor the status of their holdings on a regular basis. Simply possessing a diversified portfolio does not necessarily signify that its value will always increase. Taking a proactive stance will allow you to shift assets around when appropriate. You will otherwise be placing yourself in a risky position if the markets suddenly begin to head into bearish territory.
Achieving a higher degree of diversification in the coming year is much easier than you might think if the steps above are followed. 2019 may usher in a great deal of changes and while it is impossible to possess the proverbial crystal ball, there are still many strategies which can help you to remain one step ahead of the competition.
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