10 Tips To Diversify Your Investment Portfolio

When you have some savings, it is good to invest and allocate your money to work. Most importantly, you need to diversify your investment portfolio.

Keeping too much of your money in your checking account is too tempting to spend and counterproductive.

#1 Asset Allocation

A good rule of thumb for allocation is to subtract your age from 100, and that would be the percentage of stocks in your portfolio.

#2 Diversification Is A Must

You should diversify within each security class. Investing in 10 energy stocks is not diverse. Branch out into multiple industries with different characteristics.

# 3 Growth Stocks

Stocks provide more growth, appreciating faster than other financial instruments over the longer term.

#4 Money Market Securities for Cash

Investors can easily convert money market securities into cash without loss of value. They are low-risk low return instruments with liquidity, stability and provide access to money.

#5 Bonds With Different Characteristics Investing in bonds is desirable for more predictable income streams. It is desirable to invest in various bonds: treasury bonds, municipal bonds, and corporate bonds.