How diversified does your portfolio need to be? Find out now!
A well-diversified portfolio is the key to a successful long-term investing strategy.
Have you ever heard the saying that goes, “you shouldn't put all your eggs in one basket?” The problem is, if that basket falls, all your eggs will go with it.
If you invested all of your money into one single sector & the company went to sh*t, for example, all of your money could go with it.
Invest your money in a range of sectors like tech, health care, consumer goods, financial services, oil & gas, as well as in companies located in different countries, & the portfolio is much more safer this way. This is called ‘Diversifying’ your portfolio.
Determining exactly how to diversify your portfolio depends on your investing timeframe, goals you’d like to achieve, whether they be present or future goals & the level of risk you can tolerate.
All in all, investing in the markets (whether it be the stock markets or crypto currencies) will always carry some level of risk, even when you diversify. But spreading your funds across a mix of investments can lower the risk of your portfolio being dragged down to the dirt when one company, sector or country is struggling.
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“All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions.” -ericksantos
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I also find that for novice investors that getting involved in Index Funds, is a great way to go. S&P 500 is a good one, that way you have a tiny pieces of the 500 largest companies in the world. Find one that has no annual fee and you are all but guaranteed to make some money in the long-term.
The only downside is that most of these programs usually have some sort of minimum like $1000 to even talk to you. :) Good article. upvoted
S&p 500 is a fantastic way to go. Thank you for taking time out to read & comment! :)
that's bravo
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