Weighing the Pros and Cons of Portfolio Diversification

Don’t put all your eggs in one basket!

This cliche is a central tenet of financial planning and sensible investing. When some of your assets decline in value, you want others to appreciate. The more baskets you have, the less anxious you’ll be about your eggs when a basket or two tumbles.

Diversification is a good thing, and building a diversified portfolio has never been easier for individual investors. The range of products now available offering exposure to everything — from real estate and gold to emerging stocks and hedge fund trading strategies — is enormous.

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