My Portfolio Needs Diversification

You might be in your early or late 20s and without a care in the world. You are about to get started in investing for your retirement and have read that you need to focus on the "long term" and that "investing in equity" is great as you have the time to build your wealth over time. Over 40 Years!

To be honest that is what I having been doing. Till Now.

Due to COVID-19 affecting so many markets, sectors, and economies, my portfolio as a whole is down considerably which is fine on the surface because of the investment horizon but it has unveiled an underlying weakness of my portfolio. After this epiphany, I realised the importance of having lower risk / fixed income assets in my portfolio to have a better performance in the long term. Please Read: https://www.thebalance.com/what-is-a-diversified-investment-3305834 So Why? If you see during an economic downturn that all your assets are positively correlating together downwards then it means that your portfolio lacks proper diversification and you need to relook at what you need to start investing in. Your portfolio is too exposed in one particular area and doesn't have the protection to ride out economic downturns and you could be unnecessarily loosing in your portfolio. As mine currently is. Performance To Date (Just In Case You Were Wondering) My Unit Trusts: Down 9.80% My StashAway: Down 25.30%

Diversification optimises performance, not enlarge it. Please Read: https://www.fidelity.com/learning-center/investment-products/mutual-funds/diversification

What Are My Next Steps? My portfolio is currently invested purely into equity and REITs in both Asia & US and so a natural step is to look for a fixed income asset to add to my portfolio. I first did my own online research about assets that I could bring the protection I need which meant looking at Bond Funds on Fundsupermart, Conservative Portfolios on StashAway, and maybe even the Amanah Saham Malaysia Fixed Priced Funds. These assets will hopefully negatively correlate against my riskier investments and give me the protection and diversification I need. However if you are comfortable in investing in individual bonds or in other safe stocks then please do the necessary research and analysis before purchasing them.