After a long period of silence and reflection, we will again nuevam, among the analysis now includes more news and interpersonal issues for investors.
In fact I just came across an article William J. Bernstein who is an author and consultant on financial matters and who speaks diversification.
is said that one effect of the crisis lay in the fact that portfolio diversification did not work. Diversify a portfolio will recall noes else combined financial assets garnatizar to obtain a performance at the lowest level of risk.
Analysts who support this theory is based on the crisis all markets dragged down in some cases breaking the correlations between them, ie positive or negative relationship with each other, for example if stocks rise, lower bond is that investors sell bonds to put their money in stocks that are rising and likely to generate more income in the short term.
When the markets drop suddenly at the same time any portfolio was able to adjust to time so many investors lost large amounts of money by not having been protected or at least that protection does not fincionó.
not really agree with that diversification has failed, is that just before an event of this nature is not repeated constantly in the market, it is very difficult for any strategy has responded adequately, it is as if the vehicle has ABS brakes last generation and Austen will suddenly stop playing in heavy rain with the frozen pavement and a sharp drop!
What if we take as teaching here is that investors can not cover this by placing the money without any planning, you should not prevail over the investment by instinct or my friend in my bag he said.
All investors have different needs and investment objectives, so it is not possible to pack all the investment options available and used by all as if it were a shirt or a pair of shoes.
diversification works, what might not work is the way being applied to your portfolio or just that it does not respond to any diversification, as ou can occur in many markets where all the instruments Latinamericano increase if the overall market rises and vice versa.
For Venezuela diversify only actions make no sense because the market works all in the same direction, as happens in other small stock markets in Latin America.
is why whether to invest in these countries have to think more international diversification, that is putting money into the country and others and aim to balance the best possible risk.
For now, do not forget to diversify even in extreme situations can help you lose less than expected.
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