chapter 18

Building a risk-adjusted portfolio

Being a DIY investor is not just about picking the top shares or funds in a particular sector. You also need to understand which sectors to invest in, and what proportion of your portfolio to put in them. This process is called asset allocation, and it is a crucial factor in building a DIY investment portfolio.

The greater the investment return you want to achieve, the greater the risk you will need to take. But the longer the time frame you set, the greater the chance you will achieve your investment objectives.

Investments can go down as well as up. Well we all know that, but some investments are more volatile than others. Different risks attach themselves to different investments. The biggest ...

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