The Risky Business Of Investing

What makes investing so risky?
Investing will always be risky since nothing is guaranteed, but you can choose a combination of assets that makes investing less risky.
Diversification is a technique used to manage risk by adding different types of investments to a portfolio.
Diversification is not just creating a portfolio of ten stocks instead of two. To maximize the benefits of diversification, a portfolio should contain a mix of assets (bonds and stocks).
Within each asset class, there should be more than one type of security.
The choices should contain issuers who face different types of risk, or varying degrees of the same risk.
Combining the various securities will …read more