What’s diversification when it comes to investing and why is it important?
Just like the word suggests: to diversify means to have a diverse portfolio of investments.
So if you’re investing in just one single stock, or even 20 stocks that are really similar, you’re not diversifying at all, you’re putting ‘all of your eggs in one basket’ as they say.
If, like a lot of people, the only stocks you own are at the company where you work, you might feel positive that you’re contributing to your retirement savings. But you’re not diversified. In other words, you’re not maximizing those savings the way you could – and should. And that’s simply not the best way to grow your money. For one thing, if all those eggs are in just one basket and that basket falls, well, all those precious eggs will be broken.
You don’t want that.
You want to branch out, get a variety of companies into the mix. But, of course, there’s a drawback to that: it’s hard to do and it can be expensive. Before you get discouraged, we have a solution so you can get what you need at a price you can actually afford.
How to diversify your investments easily.
You can relax because you don’t have to do this yourself. We will invest your money in a diversified basket of low-cost ETFs to grow your money gradually. Basically, diversification is just lowering your risk by spreading your money out over a lot of different investments.
And with Wall Street level expertise handling these details, you can feel confident - and excited - that you’re growing your wealth in a calculated and low-risk way. As a Registered Investment Advisor, you can be assured that we have your best interests in mind.
Here’s an example of how it works.
- John doesn’t diversify his investments and invests $100 in just one stock of Company A.
It goes down 50%. The value of his investments is now $50.
- Jose invests $100 in ten different stocks (10 x $10 = $100) including $10 in Company A.
His stock in Company A goes down 50% just like John’s.
But because he invested just $10, he only loses $5. The value of his investments is now $95.
Want to save even more money, stress-free?
Imagine a day when you don’t need to be concerned about the unexpected expenses that pop up in your life. And no longer having to worry about building your savings, much less even thinking about saving money. That’s because someone else will help take care of that for you.
Stay tuned. There’s a very bright light at the end of the saving money tunnel. And we think you’re going to love what MoneyLion has in store for you.
Learn more and get on the waiting list while you still can!