The value of a diversified investment portfolio: Using split tactics to maximise cash investment returns

A diversified investment portfolio is important in order to protect your portfolio against market fluctuations and poor performance.

As with any type of investment, there may be periods when some of your investments don’t perform as expected. Having assets with varying risk profiles can minimise the impact of any one asset’s under-performance on your portfolio.

Cash is generally a lower risk asset class to invest in but as a result, also offers lower returns than other investment products.

Here we’re exploring how you could boost cash-style investment returns with the help of a diversified investment portfolio.

How to diversify your investment portfolio through asset allocation and split tactics

With cash returns currently low, a ‘split tactics’ strategy could help you to boost your potential portfolio returns.

A split tactics strategy refers to devoting part of your investment portfolio to a higher-risk investment, possibly offering a higher yield with an aim to boost income whilst maintaining a majority position in lower risk asset classes.

For example, after consultation with a licensed financial adviser, you could build an investment portfolio exposed to both lower risk investments, such as cash, as well as potentially higher-yielding investments that have a higher risk profile than cash.

While diversification is an important part of an investment portfolio, the right investment strategy for you is unique to your own financial goals and circumstances. We strongly recommend seeking advice from a licensed financial adviser before making an investment decision.

Keep reading for more on diversification as our Managing Director Philip Ryan provides insight into his own investment strategy and shares lessons learnt from instability in global markets.

The information on this website contains general information and does not take into account your personal objectives, financial situation or needs. We recommend you consult a licensed financial adviser. Trilogy is only licensed to provide general financial product advice on its own products and does not consider your objectives, financial situation or needs when providing any information or advice.

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