Any investor, even who started investing in projects just yesterday, understands that most often investing in HYIPs is accompanied by a rather high risk. The risks are better to minimize, but how to do this? Very simple! Just one word - diversification.
Investing in one single project, even if it is profitable and seems to work steadily bringing you income for more than one week, is still a risk. One day your broker can sink into oblivion along with your savings. Therefore, from the very beginning you should think about diversifying risks.
Investing all the money in one HYIP and waiting for a miracle is absolute nonsense, it is unforgivable even for beginning investors. It is clear that here you can easily burn out and not even notice it, but the essence of the question is much wider. It is necessary to diversify your risks not only within the framework of HYIPs and even not only within the framework of various investment projects. Diversification should be applied in all areas of your life. Diversification is the distribution of your resources in different branches and the tireless search for new. In other words, part of the funds you can invest in securities, another part in real estate and the rest - in HYIPs. It is also worth doing with electronic wallets and payment systems keeping money in several platforms. To secure your funds you should always distribute it across different payment systems.
So what is the diversification? Diversification is the minimization of risk. If you sketch out a picture of how competent diversification should be performed, it turns out to distributing from 70 to 90% of your funds into low-risk assets (real estate, securities or at least bank deposits); and if you are ready to lose rest of funds in case of failure, you can distribute it into projects with a rather high degree of risk - fast HYIP projects or forex. And remember, never use borrowed funds for this type of investment!
Well, you invested your money in a few projects, what's next? And again you need to divide. Within these assets it is also necessary to separate the funds in the approximately same proportions as described above. Composing your investment portfolio you need to consider the approximate degree of risk in each project. As many top investors advise, you need to invest ten percent in ten projects. Reasonable step!
However, there are quite a few people who complain in their cases diversification does not help for some reason. Why is this happening?
First, diversification may not help because of an absolutely unpredictable human such as the project administrator, who most often has own plans for investors's deposits. Second, if you are an investor, you need to constantly analyze the situation on the market and in the project, calculate approximate risks and aim to distribute properly your funds. Besides, you should constantly monitor the HYIP and track suspicious activities as well as the solvency of the project.
Observation and analysis are explained now, but what about the proper diversification of funds within the project? Referring to the scheme “ten projects by ten percent” and “from 70 to 90% of money in reliable assets” we get another equally simple, but logical scheme - “7 out of 10 projects should have the lowest risks (of which you find out by watching the project). You should remember, not only low-interest projects can provide low risk, here it is necessary to look closely.
We come to a conclusion that in order to have successful diversification you need to pay attention to medium and low-interest HYIPs and just occasionally to fasts. Also you need to remember that the following factors increase the risks: late entry into the project (not always, but in most cases); prescribed obstacles to taking the deposit; very high interest rates; sudden appearance of new and even more profitable plans and offers in the project .
Also such situation may be - you decide to divide your portfolio but you invest in some another number of HYIPs, for example, 5 or 17. What to do in this case? First of all, do not try to dial 10 projects, cause, at first, the ideal is difficult to achieve, and at the second, the main thing is not to do "ten by ten" and expect overwhelming success, but to do everything wisely. In other words, you can distribute funds between projects not divided by 10 equally but keeping a constant balance in accordance with the possible risks.
So, summarizing the basic rules for successful diversification of risks: if possible, follow the rule “ten projects by ten percents” and keep the balance; select projects with the least possible risk; do not play too long with fasts; do not forget about the possibility of scam; if you are not sure about the reliability of the project, you'd rather keep your money in your wallet until better times. Good luck!
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Random quote about money
"В финансовых делах я бы советовал избегать «доказательств», полученных задним числом: ведь если бы книги по истории были ключом к богатству, тогда в списках богачей мы увидели бы исключительно библиотекарей."
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