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The Benefits of Diversifying Your Portfolio with Global Investments

Writer's picture: LeoC, CFALeoC, CFA

Source: Callan Institute

Investing in a diversified portfolio is a key principle for the #PrudentInvestor , and adding global investments to your portfolio can be a great way to further diversify your investments and potentially increase your returns. Here are some of the benefits of diversifying your portfolio with global investments:


  1. Reduced risk: By investing in a mix of assets and markets around the world, you can reduce the risk of losses in any single market or asset class. This is because different markets and assets often perform differently in different economic and market conditions, which can help to balance out any losses in one area with gains in another. For example, if the stock market in one country is experiencing a downturn, investments in other countries or asset classes, such as bonds or real estate, may provide stability to your overall portfolio.

  2. Greater opportunities for growth: Investing in a range of markets around the world can provide access to a wider range of investment opportunities, including growth opportunities in emerging markets, such as technology companies or infrastructure projects. This can help to increase your potential returns and provide a greater opportunity for wealth creation over the long term.

  3. Protection against currency fluctuations: Investing globally can also provide protection against currency fluctuations, as investments in different currencies can help to balance out any losses in one currency with gains in another. This can help to reduce the impact of currency fluctuations on your returns and provide stability to your portfolio over the long term.

  4. Access to a wider range of investment options: By investing globally, you can access a wider range of investment options, including local stocks, bonds, real estate, and alternative investments such as commodities, precious metals, and private equity. This can provide greater flexibility in your investment decisions and allow you to tailor your portfolio to your specific investment goals and risk tolerance.

  5. Improved portfolio performance: A well-diversified portfolio that includes global investments can help to improve overall portfolio performance by reducing the impact of any single investment on your returns and reducing the overall volatility of your portfolio. This can help to increase your potential returns and provide a greater opportunity for wealth creation over the long term.


It's important to keep in mind that global investing can come with additional risks and uncertainties, such as political risk, currency risk, and economic risk. However, by carefully considering your investment goals and risk tolerance, and working with a financial advisor, like Brazen Capital, to develop a well-diversified portfolio, you can potentially maximize the benefits of global investing and achieve your financial goals.

Eggs balancing

In summary, diversifying your portfolio with global investments can be a smart way to reduce risk, increase opportunities for growth, and improve overall portfolio performance. By considering your investment goals and working with a financial advisor, you can make informed investment decisions and achieve your financial goals through global investing.


The adage is still true: "Don't put all your eggs in one basket".

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