Top tips for successfully diversifying your portfolio

Most investors would feel uncomfortable investing their entire portfolio in one asset class just because it was doing well. The recent experience in financial markets is a timely reminder of the risks associated with return. Portfolio diversification is often cited as one way of mitigating these risks but successful diversification still requires a clear understanding of the characteristics of each asset class and how the risks and returns interact with each other. What may be right for one investor may not suit the next because each will have their own requirements with differing abilit...