The stock market has been volatile, and a large number of investors are looking for ways to move out of equities because they cannot take the ups and downs. It isn’t easy to mitigate the volatility, but there is a way to lower the overall beta of a portfolio by adding alternative asset classes such as currencies.

An investment in the foreign exchange market can help individual and institutional investors to truly diversify their portfolio and protect themselves against currency devaluation, inflation, and bank insolvency and bankruptcy.Because markets are often driven by human emotion and unforeseen events, it is impossible to predict future prices. Consequently it is important to have a truly diversified portfolio of investment strategies. The ability to profit without regard to its direction is a priceless advantage over buying stocks. Investors should be willing to sacrifice some of the upside potential of a pure equity portfolio in order to preserve capital in times of a declining stock market. This preservation can be done through alternative investments such as futures and Forex trading.

Furthermore, currency investments can function as a hedge against the continuous risk that is present in running any business and especially in today’s global economies. While currency trading is a far cry from investing, adding a foreign exchange component to a portfolio by investing in foreign currency trading might be something to consider in today’s world financial environment.

Due to the nature of the currency markets, it is also important that traders diversify within their trading accounts. The keys to diversification in Forex is not necessarily buying the Euro and selling the Swiss Franc. True diversification can be achieved through the use of various trading strategies and talents. In other words, even individual traders should look to have a portion of their trading account managed by professional trade teams. The purpose of this is not to say that professionals will ultimately always have better results than you, but is simply for the purpose of diversification. Regardless of skill all traders will go through periods of winning and losing trades, thus adding a Managed Account decreases some of the volatility within a trading portfolio.

Like the old saying goes, investors should “Never put all our eggs in one basket.” If you are an experienced investor looking for opportunities while trying to protect you wealth as well, then you need to consider the benefit of diversifying your investment portfolio since diversification spread risks of individual underlying assets. Forex Managed Accounts through Paladin Forex will help traders optimize their portfolios.