Benefits of Portfolio Diversification | Britannica Money
Selecting eggs for your baskets.
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“Don’t put all your eggs in one basket” is a well-worn piece of advice we’ve all heard. It’s a cliché, to be sure, but one worth repeating because it’s the best way to sum up one of the core concepts of investing: portfolio diversification.
In its simplest form, diversification means spreading your investment dollars across different asset classes, such as stocks, bonds, and other investments, like foreign currencies, commodities, and even cryptocurrencies. Diversification also means owning many types of stocks and bonds in different sectors and industries, and from many regions around the globe.
Key Points
- A diversified portfolio contains a mix of many…
