(This question focuses on conventional stocks only. I’m early in my career and won’t need my invested funds for decades so I don’t have a problem with my portfolio consisting of very low allocation in bonds and the like at this time.)
I invest heavily in individual tech companies and individual cyclical consumer goods companies as those are sectors I have at least a fair understanding of. However, I feel the need to increase my portfolio’s diversification over the next handful of years. That being said, it makes me uncomfortable investing in sectors where I have less understanding. Currently I’ve done it through Mega-Cap Growth ETFs with the idea that easy diversification can be relatively safely achieved by investing in internationally established corporate giants through ETFs that don’t directly share the same set of risks as my individual stock picks.
Aside from simply “take the time to become intimately familiar with the ins and outs of new sectors”... How do you achieve smart and safe diversification? How else can it be done?
What % allocation of a stock-based retirement portfolio “should be” dedicated to diversification as a hedge against losses in volatile sectors when retirement is still 20-30 away? What’s the generally accepted %age and what do you personally believe?
Thanks.
Submitted December 16, 2018 at 10:10AM by groundzr0 https://ift.tt/2rAcZNc
