What are the advantages of having a diversified portfolio?

A good investment portfolio is a mix of a wide range of asset class. Different securities perform differently at any point in time,  so with a mix of asset types, your entire portfolio does not suffer the impact of a decline of any one security. When your stocks  go down, you may still have the stability of the bonds in your portfolio. There have been all sorts of academic studies and  formulas that demonstrate why diversification is important, but it’s really just the simple practice of “not putting all your eggs in  one basket.” If you spread your investments across various types of assets and markets, you’ll reduce the risk of your entire  portfolio getting affected by the adverse returns of any single asset class.



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