5 Ways Investors Can Escape Economic Cash Crunch

Portfolio Diversification. In investments, not putting your eggs in one basket is called "Portfolio Diversification. Portfolio diversification is the process of investing your money in different asset classes. It's basically having a blend of investments. Diversification is key to keeping your portfolio balance healthy especially in periods of economic downturn.

Why Is It Important to diversify? It’s simple! To minimize the overall risk. In the event of you carrying all your eggs in one basket, there's a greater risk of you losing all of them if something bad happens.
However, if you place your eggs in different baskets, you still have some eggs left if anything happens to one of the baskets. This can also be likened to your investments.

When you effectively diversify your portfolio, you minimize risks. So, even if unforeseen market events come up, all your investments will not be uniformly affected.

How Can You Diversify Your Portfolio?

1. Choose A Range of Assets
This means dividing your investment portfolio among different asset categories such as stocks, mutual funds, bonds, etc.

2. Spread Your Investments
After choosing your range of assets, spread your money across them. If you're much younger, you can afford to take more risks and be aggressive with growth. However, if you are older, you can’t be as aggressive. You should spread your investments more conservatively.

3. Invest In Global Markets
The internet has made it easy and possible to invest in both local market & the global window. With the help of your mobile phone, you can easily invest in the Nigeria Stock Exchange, US or London Stock Market, etc to mention a few. 

When you invest in global markets, you get exposed to investment opportunities that are not present locally and hedge currency risk

4. Re-balance Your Portfolio Regularly
Portfolio diversification is not a one-off event. Ensure you keep building your portfolio.
There is a concept called "cost averaging." Cost averaging helps you to put a fixed amount of money into an investment at regular intervals, thereby cutting down investment risks.

5. Don’t Over-diversify
If you hold too many assets, it can do more harm than good to your portfolio. This means if you over-diversify, you may be holding back your capacity for growth. 

This is because if you have little proportions of your money in different or too many investments, your portfolio risk is definitely low, and so is your expected rate of returns. 

While portfolio diversification is important, we should not go overboard and spread it too thinly or even invest in assets that we don't require. 

You’ll also be dedicating time as well as capital, as diversification requires the regular monitoring of the health of your portfolio. Some investors choose to open fully managed portfolios, to pass over this responsibility to a professional. 

We should also know that diversification doesn't mean the possibility of losses getting incurred is eliminated completely. When you diversify and balance effectively, you lower the risk of losses to the barest minimum. Have a nice day.

Key Rules To Make Good Income Working From Home (Part 3)

 1. The Computer.
You should pay close attention to what computers can do for you in your plans to escape your job and make your work-at-home dreams come true. People who want to run a home business usually have a very small staff, in fact, a staff of one yourself! 

The rest of your needs are handled by independent contractors, depending on the kind of business you are in and the services you need. To run a serious, truly global home business, a computer is as necessary as oxygen is to life on earth.  

Those who try to fool themselves into thinking they will ever make a serious go of their home-based business without a computer are sadly mistaken. Computers give you two primary advantages: (1) They enable you to store large amounts of data and to sort by data field so that you can easily get the information you need.

(2) They enable you to develop a pattern document for every situation you'll ever be in in your business.  To run a home-based business successfully, you must anticipate just what situation will emerge and prepare accordingly. A business is based on a characteristic series of situations and a characteristic set of things that happen -- or that do not happen. 

 

You must be prepared with the proper document for each situation.  Once you have established all the protocols, and have experienced all the situations associated with your kind of business, the time will come when running your business is, in large part, a repetition of certain key tasks. 

 
 Computers are all about handling repetition swiftly and efficiently. But the computer is much more.  Today, by connecting a computer to the phone line with a modem, your machine becomes more than a data storage system and repetitive task handler. It becomes a multi-task, multi-level communications processing center that connects you to the globe. Such things as e-mail, on-line services, the Internet, the Web and more can't help but revolutionize the way business is done. 

 
 If you do not become a part of it today, you certainly are going to suffer for it greatly in the near future. If there is an effective way to market products on the Internet or any other on-line venue, no one has truly discovered it yet. The only people making money on Internet marketing are the people who are selling the concept of doing it. 

 If you have a product or a service and expect to reach millions of buyers through computer screens, you are sadly mistaken. The Internet is definitely where a lot of innovative things are happening. It's a great place to exchange ideas, find out what hot, what's not, and stay on the cutting edge whatever your particular business is.

 
2.  Your Business Hours
If you've been paying attention to the first four points, you're well on your way to becoming a successful home-based business owner.  Now we don't want you to blow it by thinking you can keep banker's hours. The global market is a 24-hour per day market, and a 365-day per year market. Let the others sleep late on Saturdays and take Sundays off. Those times could be your day to move and corner loads of customers that the others miss. You should get up earlier and quit work later. 

You should be open for business on holidays and be available 24-hours a day either personally or through your answering service. "But wait a minute!" you might be thinking at this point!  "I thought that working at home was all about freedom and an end to drudgery. This sounds like nothing but  endless work!" Well, here's the thing.  For most of you who quit your regular jobs to go to work for yourself, you'll discover something magical. Have a nice day and a great week ahead!. 

Read Part 1 Here.

Read Part 2 Here.