What is a diversified stock portfolio?

Diversification is a primary tenet of long-term, intelligent investing. Diversification is the process of spreading your investments across multiple stocks from different industries, sectors, risk profiles, and more. By diversifying, you can lower the overall risk of your portfolio. So how can you build your own diversified stock portfolio?

Why is a diversified portfolio important?

Diversifying your investments is essential in the ever-changing world of finance. A well-balanced investment portfolio can help you navigate the ups and downs of the market while minimizing risk and maximizing potential returns. Let’s explore 10 different diversified portfolio examples you may consider for your investments.

How do I build a well diversified portfolio?

Another important aspect of building a well-diversified portfolio is trying to stay diversified within each type of investment. Within your individual stock holdings, beware of overconcentration in a single investment. For example, you may not want one stock to make up more than 5% of your stock portfolio.