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Category: Portfolio

The Importance of Diversification

By Lineweaver Financial Group
December 27, 2018 Category: Diversification, Portfolio, Investments, Stocks, Bonds

Many people think their investments are diversified, but when you dig deeper on any given portfolio, we find thats often not the case. In order to diversify your portfolio, you want to choose a variety of assets stocks, bonds, cash and others but you also want to choose ones whose returns havent all historically moved in the same direction, and, ideally, assets whose returns typically move in opposite directions to hold up your portfolio hold up better in down markets. That way, even if a portion of your portfolio is declining, the rest of your portfolio, hopefully, is growing, and you can potentially offset some of the impact of poor performance on your overall portfolio. Another important aspect of building a well-diversified portfolio is that you try to stay diversified within each type of investment. For example, in terms of your individual stock holdings, beware of overconcentration in a single stock. We usually advise our clients that a single security shouldnt account for

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