10-Step Guide To Diversifying Your Portfolio | FortuneBuilders

Abstract

Portfolio diversity is a critical way to protect your investments from market risks and improve the likelihood that your total investment earnings will grow. Diversifying your portfolio has two main advantages: Your investments are better protected There's a greater likelihood that your portfolio will grow in value You reduce your overall risk by spreading your investments across a broad spectrum of assets and industries. Many investors follow the 60/40 rule, where 60 percent of an investment portfolio is made up of stocks, and 40 percent is fixed-income investments. Balance Your Investments Regularly Your investment portfolio is not a "Set it and forget it" plan. Try A Systematic Investment Plan If you don't have a lump sum of cash to invest at once, you can still invest in small amounts over time. You can invest in real estate by investing in Real Estate Investment Trusts These are investment groups that pool investor funds together to buy income-producing commercial real estate. Residential rental properties, Vacation rentals, and fix-and-flip investments are real estate investments you can do for diversification.