Personal Investment Management Basics to Diverse Your Portfolio

Personal investment management is the cornerstone of a profitable investment portfolio. Effective management allows you to diversify your personal investments more successfully.

Reasons to Diversify

An undiversified investment portfolio is more likely to fail than a diversified portfolio, which offers:

  • less risk – It just takes one bad day for an investment to become nearly worthless; if you have your finances spread across multiple venues, a sudden drop in one investment won’t be as devastating.
  • more profit – With your finances in multiple investments, you’ll be able to observe trends of the market more closely. You’ll also be able to take the risks that can pay off big—because you won’t lose everything should those investments fail.
Options for Personal Investment Management

When you diversify your investments, your portfolio may grow too large for you to easily handle. There are multiple ways to manage diversified personal investments, which depend largely on the way you invest. Online broker sites already offer you easy personal investment management tools, but if you directly invest, consider:
  • investment management software – This software allows you to track investments, graph numbers, calculate capital gains, export to tax programs, get current prices from the Internet, and more.
  • separately managed accounts – The advanced personal investor may want to look into separately managed accounts, which cost more in transaction fees but offer the investor more flexibility in order to offset gains and losses for tax purposes.

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