As an investor, your portfolio should have solid assets that protect your money from various risks and uncertainties. Here are seven things worth protecting:
1. Inflation: Investing in assets that have the potential to outpace inflation helps protect your purchasing power over time.
2. Market volatility: Diversifying your portfolio with a mix of different asset classes can help cushion against market fluctuations and reduce overall risk.
3. Economic downturns: Including defensive investments like bonds or stable dividend-paying stocks can provide stability during economic downturns.
4. Currency fluctuations: Investing in international assets or using hedging strategies can help mitigate the impact of currency fluctuations on your investments.
5. Geopolitical risks: Spreading your investments across different regions and industries can help minimize the impact of geopolitical events on your portfolio.
6. Financial emergencies: Maintaining a cash reserve or having access to liquid investments ensures you are prepared for unexpected expenses or financial emergencies.
7. Long-term goals: Constructing a well-balanced portfolio that aligns with your financial goals and time horizon helps protect your investments from short-term temptations and keeps you focused on your long-term objectives. Read here on how to break free from bad financial habits.
By incorporating assets that offer protection against these factors, you can enhance the resilience of your portfolio and increase the likelihood of achieving your financial objectives.
