Diversification is all about rebalancing your portfolio. To do this, you need to carry out checks and balances at least once every year to ensure your investment portfolio is performing the way you initially designed it.

When to rebalance your portfolio

As an investor, market conditions, company performance and investor sentiment will affect the performance of your investments over time, and the value of investments within your portfolio will change regularly. Sometimes these changes mean your portfolio no longer matches your tolerance and attitude to risk.

There’s no one-size fits all approach to this. Investing is personal and we all have different goals and a different length of time we think those goals can be met. Over time these goals or the amount of risk you’re willing to take might change.

You should check in when your circumstances change, or if there have been some big movements in the markets. As always, you need to think long-term (at least 5 years) when you invest

You can rebalance your portfolio in two ways.

One way is to use any new money or money from a regular savings to top up any investments that haven’t done so well.

Another way is to sell a portion of your investments that have done well, to top up investments that haven’t performed so well.

Where to diversify your investment?

You could look for diversification with a fund that includes different investment types across lots of geographies and asset classes such as ETFs.

Mixed investment funds can be a good way to start holding a variety of investment types too. They usually blend shares (stocks) and bonds in different proportions.

Ready to start diversifying?

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