1. Diversify with Individual Stocks and Bonds
If you have the funds and the know-how, you can create a well-diversified portfolio by investing in specific stocks and bonds. However, you must beware of concentrating on a single investment. For instance, avoid holding shares in one industry or even a specific company as this increases your risk of financial loss.
You can ensure that your positions are diversified by not allowing a single stock to account for more than 10% of your overall stock portfolio. Your goal, timescale, and risk tolerance will define your stock-to-bond-to-cash ratio.
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