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Why is portfolio diversification important?
Why is portfolio diversification important?

Learn why diversifying investments reduces risk and enhances long-term stability.

Jack McCann avatar
Written by Jack McCann
Updated over a week ago

Diversification is a fundamental principle of investing that helps manage risk and improve long-term returns. Raise Investment incorporates diversification into its strategy to create balanced and resilient portfolios.

Key Benefits of Diversification

  • Risk Reduction: Spreading investments across multiple asset classes minimizes the impact of a single asset’s poor performance.

  • Smoother Returns: A well-diversified portfolio experiences fewer extreme fluctuations, leading to more predictable growth over time.

  • Exposure to the S&P 500 and Other Markets: By including broad market indexes like the S&P 500, investors gain exposure to a diverse mix of leading companies across multiple sectors, reducing the risk of relying on any single stock or industry.

  • Protection Against Market Volatility: Diversification helps buffer against market downturns by balancing risk across different investments.

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