Author(s)

Hanjian Jiao ¹

Affiliation(s)

¹ Degroote School of Business, Mcmaster University, Hamilton, L8S4M4, Canada

Corresponding Author

Hanjian Jiao

ABSTRACT

In the context of the multi-polarization of the global economic landscape and heightened uncertainty in financial markets, this study focuses on strategies for diversification of asset allocation and risk management in globalization. By deeply analyzing the impact of changes in the global economic landscape, financial market volatility, and monetary policy adjustments on asset allocation, the study emphasizes the crucial role of geographical and asset class diversification in reducing portfolio risk and enhancing returns. The research not only introduces the application of diversified asset allocation tools such as Exchange Traded Funds (ETFs), global index funds, and financial derivatives but also further validates the effectiveness of diversified investment by analyzing the response of global capital markets and investor strategy adjustments following interest rate cuts by the Federal Reserve. The study systematically examines market, credit, exchange rate, and political risks in global asset allocation and proposes targeted management strategies, including setting stop-loss points, dynamically adjusting portfolios, and using financial derivatives. Finally, taking Goldman Sachs as an example, the study demonstrates its risk control practices in global asset allocation, providing valuable lessons for global investors.

KEYWORDS

Asset Allocation, Diversification Strategies, Risk Management

CITE THIS PAPER

Hanjian Jiao, Research on Diversification of Asset Allocation and Risk Management in the Context of Globalization. Financial Engineering and Risk Management (2025) Vol. 8: 36-46. DOI: http://dx.doi.org/10.23977/ferm.2025.080205.

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