5. Asset Allocation or Target Date Funds - Deepstash
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5. Asset Allocation or Target Date Funds

5. Asset Allocation or Target Date Funds

Asset allocation funds are the simplest approach to diversify your portfolio. These are mutual funds that have a fixed stock and bond combination. A 60/40 fund, for example, will allocate 60% of its assets to stocks and 40% to bonds or cash. As a result, a portfolio whose asset allocation mix gets more conservative as the target date approaches.

For a fund that alters its risk term profile over time, target-date funds could be a good instrument. You will have to choose the duration, while the fund managers will do the diversifying, future adjustments, and rebalancing for you.

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3. Invest in a Mix of Mutual Funds and Exchange-Traded Funds

3. Invest in a Mix of Mutual Funds and Exchange-Traded Funds

Using ETFs and mutual funds are simple ways to choose asset classes that help diversify your portfolio.

Begin your mutual fund by investing in a few companies that you trust, and even use daily. Other alternatives include commodities, and real estate investment trusts (REITs).

The key...

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Diversification

Diversification

A diversified portfolio ensures that your capital is spread across a variety of investments. It ensures that you are not reliant on a single investment or industry for all your rewards. Fortunately, there are multiple asset classes to invest your money into, such as equity or bonds. It reduces yo...

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2. Customize with Index Funds

2. Customize with Index Funds

Investing in securities that replicate multiple indices is an excellent approach to diversify your portfolio over time. An index fund will hold all the securities in each index to closely replicate the performance of that benchmark. By incorporating specific fixed-income solutions into your portf...

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1. Diversify with Individual Stocks and Bonds

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 ris...

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Conclusion

Conclusion

It is one thing to have a large portfolio and another thing to have a well-diversified portfolio. To be well-diversified, you must have a wide range of investments such as stocks, bonds, real estate funds, international securities, and so on. By so doing, you are spreading out your investment ris...

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