Investors understand idioms like “don’t put all your eggs in one basket,” but what does that really mean when it comes to their investments? There has to be a better plan than going all or nothing in risky technology stocks or conservative utilities stocks.
That’s where diversification comes in. Being diversified means spreading out investments over a range of asset classes. This goes beyond owning different kinds of stocks (which investors should do). It also means adding bonds, precious metals, real estate, and even assets like collectibles or Bitcoin if your risk tolerance allows.
