Why Should I Diversify My Stock Portfolio?

The adage "don't put all your eggs in one basket" is one that we have all heard. It certainly applies to stock investing as well.

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Diversification is crucial for building long-term wealth. One of MyWallSt's six golden rules for successful investment

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By holding equities from a variety of different categories, diversification in the realm of investing helps to lower risk

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Invest in businesses with various market caps. These groups are divided into equities with small, medium, or big market capitalizations.

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While investing in shares of big businesses can provide steady, regular gains, they might not be able to provide significant growth

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Due to the fact that the share prices of these well-established companies rarely fall sharply, large cap stocks also aid in protecting your portfolio against volatility.

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Another choice is to buy some small-cap stocks, which have the biggest potential for outsized gain but also come with a lot more risk.

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To reduce risk, investors may consider making investments in a variety of businesses.

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Purchasing equities from other nations is another excellent approach to bolster your portfolio because different markets typically do well at different periods.

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