Don’t put all your eggs in one basket. It’s a key axiom when it comes to managing your money. And the need for good balance and diversification requires looking at your entire financial picture, not just your portfolio allocations. Say you have just landed a job at Microsoft. Congratulations! But now that your income is reliant on the health of the technology sector, make sure your portfolio isn’t chock-full of technology stocks. Or if your job and your home are based on a community whose fate is tied to a particular industry, don’t put even more of your money into that sector. Mix it up a bit.
Investing is the biggest area to focus on for most people. Diversification involves more than avoiding putting too much money in any single company, industry, sector or geography. It also involves diversifying investment strategies. A diversified portfolio, for example, might include exposures to value and small-cap stocks as well as large-cap. Time can also be a diversification strategy: Spreading your contributions over the course of a year means you’ll be investing regardless of whether markets are rising or falling.
Call us today at 901-435-4250 to see how we can diversify your portfolio.
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