If you’re a beginning investor, it’s likely you’re concentrating on building your portfolio. But as important as it is to build that portfolio, you should also ensure that it’s diversified. The current market uncertainty caused by COVID-19 is a perfect example of why diversification is so important.
Why is a diversified portfolio so important?
There are three key reasons why diversifying is important:
Are you ready to start investing? Investing in the stock market can be particularly rewarding, but not without risk. If you’re particularly risk averse, you may want to consider another method of investing, or start the investment process slowly. This can also be true for older potential investors who do not have the time or inclination to wait out a downswing on a stock.