ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It is one way to balance risk and reward in your investment portfolio by diversifying your assets. Diversification is the practice of spreading your investments around so that your exposure to any one type of asset is limited. This practice is designed to help reduce the volatility of your portfolio over time.

Detailed explanation-2: -Diversification is the spreading of your investments both among and within different asset classes. And rebalancing means making regular adjustments to ensure you’re still hitting your target allocation over time. All are important tools in managing investment risk. These strategies are all about variety.

Detailed explanation-3: -In general, to diversify is to choose more than one thing; in investment, it means apportioning funds among various assets. If one asset takes a loss, the money invested in the others won’t be affected.

Detailed explanation-4: -Buy at least 25 stocks across various industries (or buy an index fund) One of the quickest ways to build a diversified portfolio is to invest in several stocks. Put a portion of your portfolio into fixed income. Consider investing a portion in real estate. 05-Dec-2022