ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Buying stocks every year in the same company
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Buying corporate bonds and stocks in the same company.
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Buying stocks in several different companies
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Putting all of your money in a safe investment.
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Detailed explanation-1: -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-2: -Diversification is a strategy that mixes a wide variety of investments within a portfolio in an attempt to reduce portfolio risk. Diversification is most often done by investing in different asset classes such as stocks, bonds, real estate, or cryptocurrency.
Detailed explanation-3: -For instance, a diversified investor’s portfolio may include stocks consisting of retail, transport, and consumer staple companies, as well as bonds-both corporate-and government-issued. Further diversification may include money market accounts and cash.
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