A portfolio of stocks may achieve diversification benefits if the stocks that comprise such portfolio are not perfectly positively correlated.
A stock portfolio is a collection of stocks that are invested in with the hope of making a profit. By putting together a diverse portfolio that spans various sectors individual will be able to become a more resilient investor.
This is because if one sector takes a hit, the investments held by you in other sectors aren’t necessarily affected.
When assembling a stock portfolio, it’s important to have the organizational goals in mind beforehand. That way the decision-making process is guided by reason as opposed to emotion.
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