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What happens if I don’t diversify my portfolio sufficiently?

What happens if I don’t diversify my portfolio sufficiently?

Not diversifying a portfolio sufficiently can mean putting your assets at greater risk of loss. At the same time, less diversification means more risk but also the possibility of a better return.

An investor that put all of their assets into Apple Inc. (APPL) five years ago would certainly be much better off than an investor that owned a broadly diversified portfolio over the same time frame. But over time, a less diversified approach can hurt an investor’s chance of achieving the long-term desired result they want for retirement.

An investor who wants to prudently wants to grow their assets over time should resist the temptation to put too much capital into one stock or investment.

What are Some Strategies for Diversifying a Portfolio?
How Can I Check if My Portfolio is Diversified?

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