Investment Tips: If you want strong profits without risk, then you have to bring in investment Diversification, check details

Investment Tips: If you want strong profits without risk, then you have to bring in investment Diversification, check details


new Delhi. diversification of investmentsDiversification Of Investments) reduces the risk of the investor. Therefore an investor’s portfolio (Portfolio Diversification) not only in a variety of stocks (Stocks Investment) but it should have multiple countries and assets (Assets Investment) should also be invested in. This is the conclusion Credit Suisse Global Investment Returns Year Book 2022 (Credit Suisse Global Investment Returns Year book 2022) Of. It states that investors from all countries will get equal returns at low risk (Investment and Return) or get higher returns on the same risk.

Credit Suisse says that increase in volatility, inflationinflationPortfolio diversification becomes all the more necessary in situations where there is a continuous increase in ) and rate hike prospects. The report said that investors from small and developing countries benefit more from global investment than investors from developed countries.

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global investment

The Credit Suisse report said that if we talk about international diversification, today globalization has increased to such an extent that the markets move together and reduces the potential risk. International exposure (International Investing) has huge advantages, although they cannot be considered guaranteed. “We have observed that over the past 50 years, in most countries, global investment has given a higher Sharpe ratio than domestic investment,” the report said. The Sharpe Ratio indicates the risk-adjusted returns of a portfolio. Pointing to the correlation between developed markets and developing countries, this Credit Suisse report says that despite the increasing correlation, the potential diversification benefits are enormous.

Investors from developing countries benefit more

Investors in small and developing markets can benefit more from global diversification than investors in developed countries. The report says that the markets of smaller countries are dependent on companies as well as sectors. According to a Credit Suisse report, technology accounts for 19 per cent of the market capitalization in the FTSE World India Index. The share of financial companies is 19 percent and the share of industrial sector is 12 percent.

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Credit Suisse’s report also tells about big Indian companies. Reliance Industries Limited has 10 percent share on the index, Infosys has 8 percent and Housing Finance Corporation has 6 percent.

Tags: foreign portfolio, Investment and return, Personal finance


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