Hey Gotraders,
Happy Monday! It’s a long weekend in the U.S. as it’s Labor Day today. We will be back in your inbox with market updates tomorrow.
Let’s take a look at diversification today - what is diversification, why is it important, and how to diversify your portfolio.
Let’s get started!
What is diversification? 🤷
Ever heard of the phrase “putting all of your eggs in one basket?” Well, diversification simply means NOT putting all of your eggs in one basket.
Why is diversification important? 🤔
Diversification is a technique used by investors to reduce overall risk by investing in different assets that would react differently to an event. For example, should an event take place that impacts investment A, the same event may not necessarily impact your other investments. Your entire portfolio would be exposed to risk if you had invested solely in investment A. However, the amount of risk you are exposed to is reduced if you have a diversified portfolio.
Ways to diversify your portfolio 💡
There are several ways to diversify your portfolio. Spread out your investment by diversifying across various companies, industries, geographies, asset classes (stocks, bonds, ETFs, commodities), and other categories.
It is really important for ALL investors, not just beginner investors, to have a diversified portfolio. Gotrade has over 800 stocks and over 100 ETFs on our platform to help you diversify your portfolio.
Invest safely, and wisely!
That’s all from us for now.
Signing out,
Fund your account 💵
The stock market resumes trading tomorrow. Get ready, and fund your account in advance.
Enjoyed the newsletter? 🤗
Why not share with your family or friends who may be interested in starting their investing journey. Simply forward this newsletter - all they got to do is click the “Subscribe Now” button below… Or they can get the Gotrade app - they’ll automatically become a subscriber.
The legal stuff 🤓
Disclaimer: TR8 Securities Inc., trading as Gotrade, provides this service as general information only, without taking into account your circumstances, needs, or objectives. You should consider the appropriateness of any forecast or other information herein for your individual situation. If in doubt, you should seek independent professional advice.
Gotrade utilizes financial information providers and information from such providers may form the basis for analysis. Gotrade accepts no responsibility for the accuracy or completeness of any information herein contained. Additionally, any third-party information provided therein does not reflect the views of Gotrade or any of their subsidiaries or affiliates. Opinions are the authors; not necessarily that of TR8 Securities or any of its affiliates, subsidiaries, officers, or directors.
All investments involve risk and past performance does not guarantee future results or returns. There is always the potential of losing money when you invest in securities or other financial products. TR8 Securities Inc. is licensed to carry on business as a Labuan Securities Licensee under the Labuan Financial Services and Securities Act 2010 (License No. SL/20/0014).
Diversification is for people who don't know what they're doing. You think you're smart enough? Invest in that one thing you believe will give the highest return.