From the course: Start Young for Your Best Retirement
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Diversification: What's in your account?
From the course: Start Young for Your Best Retirement
Diversification: What's in your account?
- You've heard the expression don't put all your eggs in one basket, right? Well that's really the essence of diversification. The eggs represent your money, and the one basket represents a single sort of investment. But what does this really mean, especially if you're looking at a statement that looks something like this? It's all very well to assume that investment advisors and fund managers know what they're doing. But you worked hard for your money, so you really should understand how best to put it to work. Most diversification discussions center around the stock and bond markets. Buy stocks that are higher risk and higher return and balance with bonds at a lower risk and lower return. Or, buy a selection of funds that have diversification built in. Think of diversification as taking all the money that you're going to save in your lifetime and putting it into different buckets. For example, housing's usually the biggest investment of your life. Buy for value and long-term…
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