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In finance, diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets.
Not sure if your investment portfolio is diversified enough? Here are six tips to help you change that.
“Many retirees misunderstand diversification, presuming it solely involves spreading funds across different bank accounts or varied financial products,” said Tammy Trenta, a financial planner ...
Investing money in the stock market is a proven way to grow wealth, but it's not without risk. Diversification is a strategy that aims to manage risk while still allowing you to realize your ...
When a low-risk investment is made, the return is also generally low. Similarly, high risk comes with a chance of high losses. Investors, particularly novices, are often advised to diversify their portfolio. Diversification has the statistical effect of reducing overall risk.
Example investment portfolio with a diverse asset allocation. Asset allocation is the implementation of an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investor's risk tolerance, goals and investment time frame. [1]