ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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diversify an investment portfolio
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share risk with other policy holders and the insurance company
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protect assets
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protect against potential losses
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Detailed explanation-1: -Why Is Diversification Important? Diversification is a common investing technique used to reduce your chances of experiencing losses. By spreading your investments across different assets, you’re less likely to have your portfolio wiped out due to one negative event impacting that single holding.
Detailed explanation-2: -Over diversification is possible as some mutual funds have to own so many stocks (due to the large amount of cash they have) that it’s difficult to outperform their benchmarks or indexes. Owning more stocks than necessary can take away the impact of large stock gains and limit your upside.
Detailed explanation-3: -Domestic stocks. Bonds. Short-term investments. * You could lose money by investing in a money market fund. International stocks. Sector funds. Commodity-focused funds. Real estate funds. More items
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