Diversification means spreading investments across different asset types, industries and geographic regions rather than relying heavily on one area.
The purpose of diversification is to reduce the impact of any single investment performing poorly. Because different assets tend to perform differently under varying economic conditions, diversification can help smooth overall portfolio returns over time.
While it does not remove risk entirely, diversification is a foundational principle of disciplined investing.
Other FAQs
The tax treatment of premiums depends on the type of cover and how it is structured. For example: Income protection premiums are often tax deductible when held outside superannuation. Life, [...]
All investments carry some level of risk, but risk can be managed — not eliminated. Ways to manage risk include: Diversifying across asset classes Avoiding concentration in a single investment [...]
Once you’ve paid off the second smaller loan, you can apply to remove the guarantee. This means your guarantor will only be liable for as long as it takes you [...]
Financial planning may assist with: Setting clear financial goals Superannuation strategies Investment planning Personal insurance and risk protection Retirement planning Cash flow and budgeting Estate and legacy considerations Advice is [...]
This is one of the most common and important retirement questions. The longevity of your savings depends on several factors, including: How much income you draw each year Investment returns [...]
This is a grant available to Australian citizens or permanent residents who wish to buy or build their first home, which will be their principal place of residence within 12 [...]
Borrowing capacity for an SMSF commercial property loan is assessed differently to a standard home loan. Lenders will typically consider a range of factors, including: The SMSF's existing balance and [...]
There isn’t a single number that suits everyone. The amount you need depends on your lifestyle expectations, housing situation, health, travel plans and whether you expect to receive any Age [...]
Yes. Eligible Self Managed Super Funds (SMSFs) can purchase qualifying commercial property, either outright using available fund assets or through a Limited Recourse Borrowing Arrangement (LRBA), subject to superannuation and [...]
Your super investment option should reflect your time horizon, risk tolerance and overall financial strategy. Many people remain in default or “balanced” options for years without review. While these may [...]
Off-the-plan apartments are often pitched heavily at investors due to the tax* benefits that come with depreciation on new properties and rental guarantees. Tax savings will depend on your individual [...]
Yes. Insurance can be held either inside or outside superannuation, and sometimes a combination of both is appropriate. Holding cover outside super may: Provide greater flexibility in certain claim situations [...]
Deposit requirements vary between lenders and depend on factors such as the property's location, use, value, and the overall strength of the SMSF. In most cases, SMSF borrowers should expect [...]
Recent legislative changes mean new SMSF borrowing arrangements for residential property are generally no longer available. However, eligible SMSFs may still be able to borrow to acquire qualifying commercial property [...]
Financial planning is the process of understanding your current financial position and creating a strategy to help you achieve your short-, medium- and long-term goals. It can cover areas such [...]
