Diversification means creating an investment portfolio that contains different types of investments within each of the major classes. A diversified portfolio might include stock in several different companies or a number of stock mutual funds, government and corporate bonds. You might diversify a larger portfolio even further by including a range of investments from other asset classes, such as real estate.
Reasons to Diversity
There are two important reasons to diversify your investment portfolio:
1. To take maximum advantage of market conditions
2. To protect yourself against downturns
Diversification Tips:
Balance growth investments with those that produce income.
Invest in both large and small companies, as well as a mix of well established and new companies.
Look for investments in unrelated industries or a mix of corporate and government investments.
Consider some investments that are currently out of favor but have the potential to increase in value.
Reasons to Diversity
There are two important reasons to diversify your investment portfolio:
1. To take maximum advantage of market conditions
2. To protect yourself against downturns
Diversification Tips:
Balance growth investments with those that produce income.
Invest in both large and small companies, as well as a mix of well established and new companies.
Look for investments in unrelated industries or a mix of corporate and government investments.
Consider some investments that are currently out of favor but have the potential to increase in value.
