The Oxford Club is an independent financial research network and publishing firm based in Baltimore, Maryland. Their mission is to educate as many investors as possible to build, grow, protect and sustain their business and personal wealth.
As part of that mission, the Club recently published an article on its four main investment strategies. It has made this material freely available to everyone interested so everyone may benefit from the advice. The Oxford Club wants all investors to succeed, whether or not they enroll for its paid services.
The Club’s first investing principle is to diversify your investment portfolio. Many investors have heard of diversification as a risk minimization strategy, and so they buy a handful of different stocks. But that doesn’t go far enough. As Harry Markowitz proved back in the 1950s, investors need to spread their money out among all assets classes, and not hold just stocks. Markowitz won the Nobel Prize in Economics for his work.
Therefore, the Oxford Club recommends people hold stocks, but also bonds, options, commodities and alternative investments as well. And diversification also means to diversify what you own within each asset class as well. And you should diversify risk levels as well. For instance, you can buy Treasury bonds, corporate bonds and municipal bonds. Corporate bonds vary in the amount of risk they have from bonds rated AAA to high-yield junk bonds. Municipal bonds are considered generally safe, but that really depends on the financial status of the particular local government involved. If a city’s economy is booming, its bonds are clearly safer than a city located within an area with a poor economy and high unemployment.
The Oxford Club has over 157,000 members of entrepreneurs and investors in 130 countries. It publishes newsletters, sends out trading alerts and hosts investing symposiums.