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What advice does Daily Finance offer about online portfolios?

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Investors need to incorporate exchange-traded funds, or ETFs, and diversify their portfolios with gold, according to DailyFinance. ETFs allow investors to access entire markets via a single share, while gold brings the benefits of a non-correlated asset to the portfolio.

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Full Answer

ETFs help an investor to hold different stock sizes in different areas and sectors, leading to diversification, notes DailyFinance. The ETFs also help the investor enjoy the benefits of holding other asset classes. A single ETF gives the investor exposure to thousands of stocks, allowing him to put money in broad categories but at the risk of a single stock. Some of the stocks that investors can access includes bonds, gold, domestic stocks, silver and international stocks.

Gold adds an element of non-correlation to an investor’s portfolio. The correlation between gold and other investment options is zero, according to DailyFinance. This investment comes with guaranteed returns. Allocating part of the portfolio to gold protects and enhances returns on investment while reducing the level of volatility. Investors who diversify their portfolios with gold get cushioned against inflation as well. Gold insures the portfolio against political turmoil, market failure or war. The best ways to add gold to a portfolio is by purchasing gold coins or buying shares in companies that deal in gold.

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