Adding Hard Assets is a Great Way to Diversify a Portfolio

Many investors believe that hard asset investments are meant to be enjoyed, held onto and later sold for a profit. Typically, the people who invest in diamonds or other precious gemstones, hold on to their investment until they can sell the hard assets; for more than the original purchase price.

One thing is for certain. When you adopt the mentality of diversifying your portfolio, you have created a buffer against a financial crisis, which can last over a relatively long period of time; and has proven to protect against inflation. Furthermore, it has been established that investing in a number of different asset classes will smooth out a portfolio's performance over time, as it can be expected that some assets will zig; while others may zag.

Many investors are surprised to learn that only hard assets have outperformed all other major asset classes, since the financial crisis. The investing lesson here is that diversification as a hedge works. Especially within a major asset class, such as gemstone investing and other hard assets.