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What is a good diversified portfolio?

Most well-diversified portfolios are a mix of stocks, bonds, and cash. And you can achieve proper diversification with just 3–5 investments. Plus, that's how several billionaire investors recommend you invest. Below is a complete overview of how to balance risk and reward, a look at asset classes, and five examples of diversified portfolios.

What is a diversified stock portfolio?

A diversified stock portfolio contains a broad variety of stocks, but it is still focused on that single asset class. When we discuss diversification among asset classes, the same concept applies but over a broader range.

Why should you invest in a diversified portfolio?

Added security can be measured in the increased profits that a diversified portfolio tends to bring in when compared to an individual investment of the same size. Diversification is a great strategy for anyone looking to reduce risk on their investment for the long term.

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