The investment pyramid model is a widely recognized capital allocation strategy that helps investors minimize risks while ensuring sustainable portfolio growth. Its structure divides investments into three tiers, arranged by risk level and expected returns—from the safest at the base to the highest risk at the top.
The base tier serves as the protection layer for your wealth, consisting of low-risk investments such as:
Government bonds
Savings funds
Stable blue-chip stocks
This layer acts as a shield against market volatility, ensuring your portfolio remains secure during economic downturns.
The middle tier focuses on balancing risk and reward, typically including:
Stocks of growing companies
Exchange-Traded Funds (ETFs)
High-quality corporate bonds
The goal here is to steadily increase portfolio value over the medium to long term while maintaining manageable risk levels.
At the top of the pyramid are investments with higher risk but potentially substantial returns, such as:
Emerging technology stocks
Cryptocurrencies
Startup ventures
While this tier offers opportunities for significant profit, it also comes with a higher probability of loss. Therefore, capital allocation in this section should be kept limited to protect the overall portfolio.
The investment pyramid model empowers investors to diversify their portfolios, control risk effectively, and maximize growth potential. The key to success is maintaining an appropriate capital ratio for each tier, tailored to your financial goals and risk tolerance.
.png){kind=logo}
Tiếng Việt
English
