The most common and traditional form of diversifying one’s portfolio is by diversifying across various asset classes, such as equities, fixed income, real estate, commodities like bullion and crude etc. However, many investors will readily sacrifice this discipline when a particular asset class is faring exceedingly well. As a result, their allocations become distorted.
Many investors want to play safe and avoid exposing their money to market-related risks. But an overly conservative investing strategy also exposes you to a type of risk which finally leaves you without having enough money in the future.