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What is a diversified portfolio? - DFSIN - SFL

What is a diversified portfolio?

“Don’t put all your eggs in one basket.” This adage certainly applies in the area of investing. But how, specifically, can it be put into practice?

January 17, 2024

When it comes to investing, diversification plays a part in sound risk management: by spreading your assets among a number of different investments, you reduce your exposure to the risk of underperformance by any one of them. 

But simply holding “a number of” investments isn’t enough. Here are five basic components of good portfolio diversification.