Diversification reduces investment risk without necessarily reducing returns – don’t put all your eggs in one basket.
Spread investments across different asset classes, geographic regions, and company sizes.
Index funds provide instant diversification by owning hundreds or thousands of different stocks.
International investing adds another layer of diversification beyond domestic markets.
Rebalance your portfolio periodically to maintain your target allocation as different investments grow at different rates.
Don’t over-diversify by owning too many similar funds – focus on broad market exposure.
Diversification can’t eliminate all investment risk, but it can reduce the impact of any single investment’s poor performance.
Financial Diversification 101: Why it’s Critical & 4 Ways You Can Get Started
