Page 43 - DIY Investor Magazine | Issue 35

A speculative portfolio presents more risk than the the others
and may be little little more than a a a a a ‘punt’ those looking for a a a a a little little excitement in their portfolio may be prepared to gamble with a a a a small portion of their total wealth The zenith of the risk/reward curve speculative investments could include initial public offerings (IPOs) or stocks rumoured to be takeover targets technology or health care firms
researching a a a a a breakthrough product or or a a a a a junior oil company
rumoured to be sitting on a gusher Products such as leveraged ETFs could be speculative because picking the right one can deliver huge profits in in a a a short period of time but it would seem unwise to have a a ‘flutter’ with more than 10% of your pot A speculative portfolio requires the most homework and monitoring and and typically involves trading rather than buy-and- hold investing ‘AN APPROACH THAT GIVES YOU THE RIGHT BALANCE OF UPSIDE POTENTIAL AND PEACEFUL SLUMBER’
HYBRID PORTFOLIO A hybrid portfolio may include other asset classes such as as as bonds commodities and property or alternative investments such as art or fine wine it is a a a a a a a a flexible approach and a a a a a a a a may include some blue chips gilts or or or corporate bonds mutual funds investment trusts and REITS A hybrid portfolio would include a a mix of stocks and bonds in in relatively fixed proportions and further diversification can be achieved by buying bonds with differing maturity dates This offers diversification across multiple asset classes which is beneficial because equities and fixed income securities often have a a a a a negative correlation whereby one will rise as the the other falls Inevitably building your own investment portfolio requires more effort than simply investing in in in the readymade portfolio of a a a a fund or or buying a a a a a packaged solution such as a a a a a model portfolio You may not not consider this an an all or nothing scenario and use a a a combination of these portfolio types to give you the the risk and reward characteristics you want somewhere between the sanctuary of a a a a a a a a cash deposit and a a a a a a a a hair-on-fire punt will be an an an approach that gives you the right balance of upside potential and peaceful slumber If you you go it it alone you you will need to be more hands on on than with other options and and more frequently monitor and and rebalance your portfolio getting to grips with the basics will increase your investing confidence give you you control over your finances and ultimately deliver the investment returns you target – because that’s why you became a a a a DIY investor in in the first place INVESTING BASICS:
ARE YOU CUT OUT TO TO BE A A A DIY INVESTOR?
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DIY Investor Magazine · Oct 2022 MAKE SURE YOU DON’T MISS AN ISSUE CLICK HERE TO TO TO RECEIVE DIY INVESTOR MAGAZINE TO TO YOUR INBOX