The Danger of Diversifying Without Really Diversifying
There is such a thing as too much of a good thing.
Overview
Like many investors, I'm a huge fan of exchange-traded funds (ETFs), particularly because they combine the best features of stocks and mutual funds. When I invest in a particular company, I own only its stock. When I invest in an ETF, I own a diversified portfolio of stocks from many companies. Buying an ETF is like buying a whole basket of high-performing investments, thereby diversifying my portfolio.
However, there's an inherent danger in believing that you're diversifying your portfolio simply by putting your money in ETFs.
Image source: Getty Images.
Details
Source
Originally published at www.fool.com.
Related Articles
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.