Building a custom portfolio: Diversification

It’s important to diversify your investments across your holistic portfolio, regardless of how aggressive or conservative you want to be. Different investments and markets can fluctuate independently of one another, and it’s not wise to invest 100% of your money in any single asset or asset class.

If you are customizing your own portfolio, it’s important that you diversify it, or at least allocate in consideration of your outside investments. As a rule of thumb, you can have a mix of both growth (e.g. stock) and defensive (e.g. bond) assets to suit both your time until retirement and emotional risk tolerance.  

For more information, please see this guide by The Securities and Exchange Commission regarding asset allocation, diversification, and rebalancing.

See this article to learn more about other factors to consider when building a custom portfolio.

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