In theory, diversification means one decides to keep a portfolio as a part of their risk-reducing strategy and investment process. In practice what happens is, is that one distributes their finances among various assets that would significantly decrease investment risks. Therefore, to turn portfolios into the best they can be, the direction needs to be top diversification options which always gives you different ways of rating a “risk-prone asset.” As well, risk can be spread over different invest options which stops you from having just one option (if that goes bad then you’re left with nothing). Having said that, if you are looking for a stress-free retirement, it’s not a good idea to establish an investment portfolio. Even if you do ultimately decide to go for a portfolio, ensure to review and analyze it on a regular basis.
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