Investing across various industries help reduce this risk. For example, instead of only buying technology stocks, you can include others like manufacturing, energy, and healthcare in your portfolio. This way, if one sector doesn’t perform well, the others can help balance out your returns. However, before investing, remember to research your target industries thoroughly to understand how current macroeconomic conditions might affect them.

New and younger investors might consider starting with index funds. These funds include a broad range of diversified stocks and track world stock market indices. They’re low-cost, passively managed, and have the potential to deliver good long-term returns. In a similar fashion, robo-advisors are another option worth exploring. These automated investment platforms can create diversified and personalised portfolios for you, including exposure to thematic areas such as innovation and rapid urbanisation.

Jack learned this the hard way. After the storm wiped out his single-crop field, he began planting a variety of vegetables that could handle different weather conditions. Some grew quicker while others took more time. He also explored another alternative: indoor hydroponics, which gave him added stability during storms and unpredictable weather. Together, these approaches allowed him to keep his land productive year-round through crop rotation and reduced the risk of losing everything again. 

Tip #2: Invest across different asset classes

Every asset class has its own set of advantages, risks, and vulnerabilities. They also respond differently to different economic conditions. For example, when stock prices fall, assets like money market funds or certain types of commodities may hold their value or even appreciate. 

This means that if one part of your portfolio is struggling, your other assets can help you balance your losses. By including a mix of asset classes such as stocks, bonds, real estate, and money market funds, you build a more balanced and resilient portfolio that’s better equipped to handle market ups and downs. 

When deciding on your asset mix, it is important to consider just how much risk you are comfortable taking, based on your financial situation and goals. You can choose from a variety of investment options such as bonds, money market funds, treasury bills, unit trusts, stocks and ETFs. 

Once Jack became more confident in farming, he decided to branch out. He added fruit trees, flowering shrubs, and more types of edible plants to his farm. Each crop has its own risks and rewards, and together, they helped Jack build a more stable and productive farm.