Page 35 - Waterfall City Issue 6 June 2025

Choose portfolios with
diversification
Diversification is one of the
cornerstones of a well-structured
financial plan. Equities, bonds and
property are all examples of asset
classes that can play complementary
roles in a portfolio. For example,
equities often act as the growth engine
for long-term returns, while bonds
can provide stability during periods of
market uncertainty. Each asset class
plays a specific role in your portfolio,
contributing to its resilience and overall
growth potential.

Speculative investments, on the other
hand, often lack diversification benefits
and reliability, making them unsuitable
for a solid financial plan. Trustworthy,
research-backed options provide a
more stable foundation for achieving
your goals.

Inflation threatens financial
freedom
Inflation erodes purchasing power
over time, so consider investments that
outperform it. Stocks are an excellent
example of inflation-protected assets.
When you invest in companies,
their earnings rise in tandem with
the price of items sold, offering a
natural protection against inflation. In
contrast, speculative assets are strongly
dependent on sentiment and provide
no intrinsic inflation protection.
Prioritising investments with built-
in inflation protection will shield
your portfolio from one of the most
persistent risks to your wealth.

Stay the course and exercise
patience
Trust the process. Focus on your long-
term goals, diversify your investments
and choose strategies that align with
your needs while protecting your
wealth from inflation. By taking a
steady and consistent approach, you
can navigate the challenges of the
journey and ultimately achieve the
financial independence you seek.
The long-term effects of disciplined
investing compound over time and can
be significant.

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