Expert Guidance:
Create a diversified portfolio
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Create a diversified portfolio
1. Create a diversified portfolio
2. What is diversification & risk
3. How do you diversify
4. Stocks: Industries & sectors
5. Types of bonds
6. Cash for liquidity
7. Diversifying with mutual funds
What the prospectus can tell you
Finding funds that fit
8. International diversification
9. Balancing risk and reward
 
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Diversifying with mutual funds

It takes time — and money — to diversify a portfolio, since your goal is to spread your assets among a variety of different investments. Unless you have a lump sum to invest, you'll have to accumulate the money to pay for each new investment you want to make.

That's one reason why people who want to diversify, but have a limited amount to invest, may choose mutual funds. All funds own a number of investments, and some funds spread their investments broadly within an asset class, owning stocks or bonds of different sized companies in different industries or sectors. Provided the fund isn't too narrowly focused, it may provide you with ready-made diversification.
 
Mary FarrellDon Kittell
         
   
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