#DiversifyYourAssets

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#DiversifyYourAssets — Key Principles of Smart Investing

1. “Don’t put all your eggs in one basket”

• Diversification and asset allocation reduce risk

• Helps balance performance across different market conditions

2. Asset Allocation

• Decide how much to invest in each asset class (stocks, bonds, cash, etc.)

• Allocation depends on risk tolerance, goals, and time horizon

• Can be direct (individual assets) or indirect (funds, ETFs)

3. Diversification

• Spread investments across and within asset classes

• Reduces the impact of poor performance in one area

• Uncorrelated assets (e.g., stocks vs. bonds) provide better risk control

• Diversify by:

• Company size (small, mid, large cap)

• Sector (tech, healthcare, etc.)

• Geography (domestic & international)

• Bond issuer type (government, corporate, etc.)

4. Use of Pooled Investments

• Mutual funds and ETFs offer instant diversification

• Still need to ensure your funds don’t overlap too much

5. Rebalancing

• Market movements may shift your original allocation

• Rebalancing helps restore your target portfolio mix

• Rebalancing methods:

• Redirect future contributions

• Add to underperforming areas

• Sell outperformers to reinvest in laggards

6. Timing & Costs

• Review annually or during major financial changes

• Be mindful of fees, taxes, and market timing risks

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Bottom Line:

Diversify broadly, monitor regularly, and rebalance when needed to keep your portfolio aligned with your goals and risk comfort.

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