|
|
 |
|
|
|
|
|
|
|
|
Diversification
It's important that you spread out your investments among different companies and different types of companies, so you're diversified. Your risk increases if you put too much money in one investment. Almost every financial expert recommends an asset allocation strategy, where your money is divided among different types of assets, such as:
- Stocks
- Bonds
- Cash investments (such as savings accounts)
The asset allocation strategy is built on the assumption that various investments go through good and bad periods, depending upon economic conditions and other factors. The key to asset allocation is finding the right mix of different types of investments and keeping them in balance as your nest egg grows. Rebalancing means shifting your assets from one class to another so you stay diversified and reduce your risk.
Some investments offer instant diversification. Mutual funds, index funds, and Exchange-Traded Funds (ETFs) allow you to invest in many different companies
with a minimal amount of money.
Whether you have a little to invest or a lot, you can spread your investments all over the globe.
|
| |
|
|
