How do I build a diversified ETF portfolio?

When building a diversified ETF portfolio, it is important to consider risk management strategies to ensure you can benefit from returns while minimizing potential losses. The key to understanding your risk tolerance is the amount of volatility and potential loss you are willing to accept as an investor.

Should you invest in a diversified ETF portfolio?

Building a well-diversified ETF portfolio is essential for any investor seeking long-term financial objectives, such as retirement savings or wealth preservation over time, rather than simply aiming for short-term capital gains from speculative investments with higher risks attached.

Why is diversification important in an ETF portfolio?

Diversification is spreading investments across those different asset and sub-asset classes – each of which has a different risk profile - to further help minimize losses while maximizing returns. Combined, these two strategies can help create an effective ETF portfolio designed to meet both short-term and long-term financial objectives.