Managing your financial portfolio is a lot like juggling. A young person, perhaps fresh out of college, might start by juggling small, similar-sized balls (which include a small income and a small debt). Over time, different things happen (perhaps that person buys a house or some stock) and suddenly objects of different size and weight are added to the mix.

Then, as life goes on, objects of increasing danger might be added as well: a credit card… a high risk stock… a personal tragedy. They’re not all bad (from a financial perspective) but they can hurt a person’s financial portfolio if not handled right.

Portfolio management is the ongoing process of balancing (or juggling!) your assets in order to meet your personal goals and expectations and, as much as possible, increase returns while minimizing risk.

And also, do you remember the popular saying, “Don’t put all your eggs in one basket”? The reason why you should achieve diversification in your portfolio is that the value of different asset classes tends to behave and perform very differently. Some assets move in tandem or in a similar direction with each other, while others move in opposite directions. What may surprise you is that for the same rate of return, you can actually combine different asset classes to achieve this expected return. Thus the secret to successful portfolio management is to create a portfolio by investing in different types of asset classes, that generate the lowest risk factor to achieve your investment objectives.

For your overall portfolio to be in good shape you will also need to…

· Pay down your non-income generating debts.

· Build a good credit rating.

· Work toward buying a home instead of renting.

· Reduce your depreciating assets and increase your appreciating assets.

· Make sure you have adequate insurance coverage for a variety of worst-case scenarios.

· Be aware of the risks and rewards of each type of investment.

· Be familiar with investments in general.

· Have a financial plan.

· Have a budget… and stick to it!

Simply keep in mind the above investment strategies at each of your life stages and you will find yourself abundant of fulfilments and satisfaction in your ultimate goal to nurture a healthy egg-nest of well-balanced asset classes.

Mr Stanley Chua has been serving for the past 10 years as a successful international consultant and project management expert. Harvestime Resource LLP (http://www.wowdomains.net) is a Singapore-based resource firm specializing in the marketing and distribution of high quality information in wealth creation, financial investment and planning, Internet technology and personal well-being.

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