Portfolio Diversification refers to choosing different asset classes to maximize returns while trying to minimize the risks. Seems like a rather tough and uphill task. So, let's first try to simplify what it exactly means. In layman’s terms – one should not put all the eggs in the same basket, and stand to lose everything if something happened to that basket. The eggs refer to our savings and the basket is an asset class. Thus, putting all our savings in one type of investment runs the risk of losing everything if something does go wrong.

Investments can be broadly diversified into the following asset classes –

1. Stocks and Mutual Funds – Shares of companies listed on the Stock Exchange


2. Bonds – Government or private fixed income securities


3. Real Estate – Land, building, property of any kind


4. Commodities – metals, resources derived from agriculture, petroleum etc.

Now the crucial question is - How to diversify and what factors to consider?

1. Risk– Everyone has a different risk-taking ability based on their temperament and circumstance. One's tolerance towards running losses defines where you would invest. Market volatility towards stocks being much greater than say real estate, makes the latter a safer investment.


2. Spread your investment– One should invest in a variety of asset classes or sub - classes. It is generally seen that gold prices are high when the stock market is not performing too well. That could be true even for different sectors of the stock market, like the pharma companies did really well during the pandemic when the hotel sector was in the doldrums.

3. Awareness – Keep abreast of changing government regulations and policies. International events nowadays play an important role in shaping the local markets.

4. Financial aim defined – Each person has a distinctive financial goal and a timeline to achieve it in. Once that is clear, diversification can be done in a more effective manner.

All these above factors point you towards FIKAA. Let me tell you why -

Invest in Mutual Funds - Mutual Funds invest in diverse stocks and have a readymade spread made by a professional. Surely, if the Mutual Fund is then selected by our proprietary Algorithm, taking your risk profile, age and goal into account, it would be the best option for you. FIKAA’s AI selects the Mutual Fund baskets most suited so that you don’t have to worry about diversification.

Invest in Gold – As an alternate asset class, Gold has performed really well, giving returns over 20% in the past year. Women have a special bond with Gold, and there is no downside when one invests in Digital Gold with FIKAA! Whether you buy bit by bit with a SIP or all at once.