Portfolio diversification II – Correlation, a Tool in Asset Allocation
Sequel to our last article on portfolio diversification, which was an introduction to portfolio diversification. This week, we take it a step further as we look more in-depth into the math behind portfolio diversification, i.e., using correlation to achieve the objective of portfolio diversification which reduction of systematic risk. How to Check the Correlation between…
Abiola AdekunlePortfolio Diversification
Diversification can be neatly summed up as “don’t put all your eggs in one basket”, although this statement provides little guidance on the practical implication of the role diversification plays in an investor’s portfolio and offers no insight into how a diversified portfolio is actually created. The idea is that if one investment loses money,…
Smart Investing for Beginners on a Tight Budget
Investing can seem complicated and overwhelming when it conjures images of the stock market, in reality, there are other opportunities to invest irrespective of your income or age bracket. If you’re living paycheck-to-paycheck, without much room in your budget, you might assume that investing isn’t something you can do right now, but you don’t need…
Fiscal Policy vs. Monetary Policy: Pros & Cons
Fiscal Policy vs. Monetary Policy Fiscal policy and monetary policy are the two tools used by the state to achieve its macroeconomic objectives. To have a stable economy, these two policies must have been effectively managed which are fiscal and monetary policy. Fiscal policy is the use of government spending and tax policies to either…