How to Diversify Your Investment Portfolio

Diversification is spreading investments across different assets or sectors to reduce risk. It helps protect your portfolio by ensuring that poor performance in one area is balanced by better performance elsewhere.

When it comes to investing, “Don’t put all your eggs in one basket” is solid advice. Diversification is key to balancing risk and reward. By spreading your investments across different assets, like stocks, bonds, real estate, and international markets, you reduce the chance of a major loss if one area drops.

To get started:

1. Mix Assets: Combine stocks for growth, bonds for stability, and real estate for long-term gains.

2. Go Global: Expand your portfolio by including international investments.

3. Cover Different Sectors: Don’t put all your money in one industry—spread it across sectors like tech, healthcare, and energy.

4. Explore Alternatives: Consider investing in things like gold, oil, or real estate (through REITs) to spread out your investments and reduce risk.