Some experts believe that if you do not diversify your portfolio over numerous asset classes, you are overexposing yourself to risk with each fall in the market, and wasting money in the long run.
A diverse portfolio is the solid foundation that helps your assets withstand disruptions. Financial markets are highly correlated, which means that when even one of its components malfunctions, there is a ripple effect whose consequences are felt globally.
But real estate is a tangible asset. While a stock market crash may completely deplete your equity, rendering your stock holdings worthless in perpetuity, a commercial or residential property will continue to exist as an asset, even if it may pay less until the economy recovers.
