You do not need a large amount of capital to diversify your portfolio or to consider investing in diamonds. With an index fund based on the most important stock markets you can go a long way already. With this, you can invest in different sectors worldwide, in hundred companies with completely different profiles, through a simple transaction.
A well-diversified investment portfolio includes more than just shares. Diversification means an allocation of your capital to different asset categories (shares, obligations, raw materials, real estate…) over different economic sectors and areas, and at different investment times (per month, per term, per year…). Investments involving a little more risk, however, belong to a well-diversified portfolio. Shares, for example. A more defensive-minded investor can use them to spread the risks regarding his capital and meanwhile increase his yield in the long run. In the raw materials category, diamonds could be a nice addition to your portfolio. The risks regarding this investment are lower compared to shares and obligations and the profitability is practically guaranteed.
Your portfolio ideally incorporates investments that aren’t interconnected. ‘Don’t place all your eggs in the same basket’, that is the essence of what we are trying to say. If you manage your portfolio yourself, you have to be in the know regarding the exact content of your different investment products, in order to detect connections and relationships. In reality, few investors manage to keep this diversification up on their own. This is why investment funds are so attractive: it’s a cost-efficient way of diversifying your investments.