Mammoney - Your Ultimate Guide to Personal Finance & Investing

Building a diversified investment portfolio is essential for managing risk and achieving long-term financial goals. Diversification involves spreading your investments across different asset classes to reduce the impact of market volatility. Here's a comprehensive guide to help you build a diversified portfolio: Introduction Diversification is a key principle of investing that helps protect your investments from market fluctuations. By spreading your investments across various asset classes, you can reduce risk and increase the potential for stable returns. This guide will walk you through the steps to build a diversified investment portfolio. Understanding Asset Classes Before building a diversified portfolio, it's important to understand the different asset classes available: Stocks : Represent ownership in a company and offer the potential for high returns but come with higher risk. Bonds : Debt securities issued by governments or corporations that provide regular interest p...