Portfolio Diversification: Factors to Consider When Choosing Investments
Portfolio diversification. It’s not sexy, but it’s the key to hedging your risk when it comes to investing.
If you dream of achieving financial freedom, investing and portfolio diversification can support your journey.
If you’re following the FIRE movement (financial independence, retire early), portfolio diversification is even more important.
Diversification is the practice of spreading your money across different asset classes, industries, and geographic regions. This helps reduce your risk by minimizing your exposure to any one particular investment or market sector.
Whether you’re just starting to invest, or well into your investing strategy, portfolio diversification can help you build a portfolio that will help you achieve your financial goals, FIRE or otherwise.
In this article, I’ll provide you with the key factors you’ll want to consider when you choose your investments, and tips on how to build a diversified portfolio that will help you achieve FIRE.