Everyone who invests, of course, the goal is to find profits that can be disbursed in the future. Investment has indeed become something that is being favored by many people from various circles lately. Investment has high risk but also a high opportunity for profit. However, investing is not as easy as entering the capital, waiting, and making a profit. That is in simple terms, but in practice, there are analyzes that need to be done in choosing investment products.

One strategy to reduce the risk of loss in investment is to diversify investments. Investment diversification is the diversity in the investments made by investors. Basically, investors create a diversified portfolio in order to reduce the risk of loss. The diversification is chosen from the nature of the investment market in each category which is inversely proportional to each other so that if investment A decreases, investment B increases.

How can diversification be done? Investment diversification can be done by using mutual funds. For example, an investor buys an investment product in the form of gold and shares at the same time. In times of uncertainty, gold prices tend to increase and are stable, while stock prices will be very dynamic, and vice versa when conditions are normal, stock prices will be more promising than gold. That way investors can avoid big losses in investment due to investing in only one sector.

Investment diversification can still be done even if you just buy different stock sectors. For example, an investor buys shares in the infrastructure and banking sectors at the same time, then he also has the opportunity to profit because the investment value will continue to be boosted by a sector that is experiencing an increase.

Although there is nothing wrong with investing only in one investment product or one sector in order to get maximum profit when it increases. But this has a risk for us to experience big losses when the product we invest in declines in value.

source: various sources