Diversifying your investment strategy risks
All investments carry risk. But, as an investor, one of the biggest risks you face is that of not achieving your long-term goals, such as enjoying a comfortable retirement and remaining financially independent throughout your life.
To help reach your objectives, you need to own a variety of investment vehicles — and each carries its own type of risk.
If you spread your investment dollars among vehicles that carry different types of risk, you may increase your chances of owning some investments that do well, even if, at the same time, you own others that aren’t. As a result, you may be able to reduce the overall level of volatility in your portfolio. (Keep in mind, though, that diversification can’t guarantee a profit or protect against all losses.)