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What is your meaning of Diversification?

dice diversification of assets investments

Clients often ask about diversifying their portfolio. They feel once they have a couple of properties they should move to shares, cash, bonds or something else. I agree you should mitigate risk by implementing a diversification element to your portfolio. But here is one of the reasons why I do not like to branch off into one of the other investment spaces. Think about all the time and effort you are putting into learning everything you can about this particular asset class, property investment.

We have all heard lots of stories about property investors that have tried to do it by themselves with just a bit of research on the internet, finding a partner they think they get on well with, purchasing a property thinking they are a professional investor.

It is a lot harder than that, you need to really focus on your mindset, education and planning to get it right.

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If you have done that with your property investment portfolio and you have done quite well and now you just want to go and diversify your portfolio, guess what? You owe it to yourself. You must now go and do the same amount of education and planning and focus on your mindset in a completely separate asset class because you do not want to stuff that up either, right?

Would it not make more sense to just diversify within an asset class that you actually like? You can have different types of properties. You can certainly have them in different locations. You can hold them under different buying structures. You can implement different cash flow structures for them as well. My advice is to choose an asset class you actually like. Go narrow and deep as far as you can with that one and I think you are going to do better.

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Contact Axon Property Group to get answers today. https://axonproperty.com.au/contact-us/