Beginner’s Guide to Portfolio Protection Using Asset Allocation and Diversification

You invest in making your money grow, but your chance of loss is much higher than anything else without asset allocation and diversification.

What Is Asset Allocation?

Asset allocation is the way you divide your investments between different asset classes within your portfolio to help you reduce risk and possibly increase returns over time.

Investment Options

Here are a few investment options to consider when making the best choice for your financial goals. - Stocks - Bonds - Cash

Alternative Investment Options

Any investment that falls outside of stocks, bonds, and cash would be considered an alternative investment.

Choosing the Best Asset Allocation

Wise investors will build a portfolio based on factors that include risk tolerance, time horizon, and overall financial goals.

What Is Diversification?

The diversification definition is the technique of spreading your investments around, so your exposure to risk in one particular asset category is limited.

How to Diversify

There are numerous ways to diversify, but a good rule of thumb is to invest in various industries and/or companies. 

Why Is Diversification Important?

Diversification is important because you can maximize your returns by investing in different areas that would react differently in the same volatile market.

Swipe up now to read the full post!