Building a diversified portfolio for longterm growth from "summary" of Rule #1 by Phil Town
Building a diversified portfolio for long-term growth is like planting a garden with a variety of fruits and vegetables. Just as you wouldn't want all your financial eggs in one basket, you don't want all your plants in one row. By spreading your investments across different asset classes, industries, and geographic regions, you can reduce the risk of losing money when one sector or market underperforms.
Diversification can help protect your portfolio from market volatility and economic downturns. For example, if you have all your money in tech stocks and the technology sector crashes, you could lose a significant portion of your wealth. However, if you also have investments in healthcare, consumer goods, and real estate, the impact of the tech crash on your overall portfolio will be minimized.
To build a diversified portfolio, you need to research and analyze different investme...
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