Suffered from market turbulence? Two strategies would help

· When global stocks and bonds are falling in tandem, the conventional portfolios - a 60/40 balanced approach are in big trouble.

· Portfolio diversification and automatic investment plan may protect your money.

For years, some investors relied on the so-called 60/40 portfolio—60% to equities, for capital appreciation, and 40% to bonds, to potentially offer income and risk mitigation.

Invesco recommends a 50/30/20 portfolio, split between equities, bonds and alternatives.

Buying equities and bonds is the easy part, so let's see what alternative investment means?
It includes two main types:
1. Private assets - private equity/ private credit/ infrastructure/ private real estate
2. Hedge funds - operate mainly in public markets but use less traditional tools

Diversification is also the suggestion of Pacific Investment Management Co. The company recommended shifting a portion of 60/40 portfolios into commodities to hedge against elevated inflation.

While portfolio diversification might sound complicated, it needn't be.

You don't have to hand-select your investments. Mutual funds allow you to add your money to a pool of investors' money, which the investment company then uses to buy a range of assets on your behalf.

An automatic investment plan (AIP) is to invest a fixed amount of money in a fund at regular intervals.

You will buy fewer units when a fund's price is high and more units when the price is low, which achieves the desired effect of averaging costs.

AIP has another 3 features:
- Disciplined investment to avoid pursuing rises and killing falls
- Long-term investment with compound interest
- Automatic implementation and time-saving