What's Diversification? | Fidelity

Share this & earn $10
Fidelity Investments
Published at : 18 Dec 2020
166407 views
523
24

This video can help you learn more about diversifying your portfolio to become a smarter investor.

To learn more about diversification, visit:
https://www.fidelity.com/mymoney/amateurs-guide-diversification

To watch more videos for beginner investors, visit:
https://www.youtube.com/playlist?list=PLGKKmEmJDSiL041acBKlWMsu2P-FndXji

To see more videos from Fidelity Investments, subscribe to: https://www.youtube.com/fidelityinvestments

Facebook: https://www.facebook.com/fidelityinvestments
Twitter: https://www.twitter.com/fidelity
Google+: https://plus.google.com/+fidelity
LinkedIn: https://www.linkedin.com/company/fidelity-investments

-------------------------------------------------------------------------------------

When you invest in a stock, you are taking a risk that the value may go down rather than up.

OK, we get it. Investing can be risky. One way to manage that risk is to educate yourself on basic concepts, like asset allocation and diversification.

Asset Allocation is simply financial lingo for how you distribute your money across types of investments. It’s like the strategic decision of which baskets to put your eggs in and how many eggs to put into each. The different baskets are called asset classes.

To help you decide where to put your eggs, ask yourself three questions:

1. How much time do you have before you need to use your money?
2. How comfortable are you with risk?
3. How does your current financial situation look?

Diversification is about strategically putting the right mix of different eggs in each of your baskets.

The key is that you shouldn’t invest all your money in one company, one industry, one country, one ANYTHING. Ideally, you want your investments to be negatively correlated, so when one is going down, another is going up.

Here are some typical ways smart investors diversify their portfolio:
• Invest in companies in different countries
• Own stock in small AND large companies
• Invest in companies in a variety of industries

There are some downsides to diversification. If one of your investments does very well, you won’t make as much as if it was your only investment. But consider the inverse: if you owned only one stock, and the company went out of business, you would lose more money than if you had spread your money across different investments.

Diversification won’t eliminate risk. But it's a smart way to manage risk while still giving you a chance to build your portfolio.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, Rhode Island, 02917

741646.2.0
diversificationasset allocationinvestment management

Dead Island Riptide Definitive Edition | Multiplayer #2 Staff of Power! - Ft. Rogue

Dead Island Riptide Definitive Edition | Multiplayer #2 Staff of Power! - Ft. Rogue

The ethical dilemma of designer babies | Paul Knoepfler

The ethical dilemma of designer babies | Paul Knoepfler

The Bamboos - Keep Me in Mind

The Bamboos - Keep Me in Mind

First Aid for an Infant Choking

First Aid for an Infant Choking

A hectic day in my life/ 2020 recap

A hectic day in my life/ 2020 recap

Keto Diet Plan for Weight Loss | Lose 5 Kgs in 10 Days | Indian Veg Ketogenic Diet Plan

Keto Diet Plan for Weight Loss | Lose 5 Kgs in 10 Days | Indian Veg Ketogenic Diet Plan

[MIRRORED]프리티 PRITTI 화사x청하 Hwa Sa x Chung Ha 가요대전 Mi Gente COVER DANCE

[MIRRORED]프리티 PRITTI 화사x청하 Hwa Sa x Chung Ha 가요대전 Mi Gente COVER DANCE

International Relations 101 (#2): Sovereignty

International Relations 101 (#2): Sovereignty

Conan Catches Jordan Schlansky Coming In Late - CONAN on TBS

Conan Catches Jordan Schlansky Coming In Late - CONAN on TBS

Property Brothers' Top 7 Room Transformations

Property Brothers' Top 7 Room Transformations

PENGU ON THE EU LEAGUE FINALS [G2 vs BDS] | Rainbow Six Siege

PENGU ON THE EU LEAGUE FINALS [G2 vs BDS] | Rainbow Six Siege

Cadet x Deno - Advice (Dele Alli) [Music Video] | GRM Daily

Cadet x Deno - Advice (Dele Alli) [Music Video] | GRM Daily

Gay couples from around Mexico come to be legally married

Gay couples from around Mexico come to be legally married

Truth About Divorce - What Do Men Need To Know?

Truth About Divorce - What Do Men Need To Know?

DOORDASH is THROTTLING DRIVERS ORDERS?! NEW DRIVERS GETTING BIG PAYOUTS, OLD DRIVERS AREN'T!?

DOORDASH is THROTTLING DRIVERS ORDERS?! NEW DRIVERS GETTING BIG PAYOUTS, OLD DRIVERS AREN'T!?

donkey meeting murrah December 15,  2020

donkey meeting murrah December 15, 2020

Descartes Meditation I - Of the things which may be brought into Doubt

Descartes Meditation I - Of the things which may be brought into Doubt

We will follow You Only - DPRK Music

We will follow You Only - DPRK Music

❤️(PICK A CARD)❤️Does Your EX Have Any Regrets? Do They Miss You? 💏✨🔮Psychic Reading🔮✨

❤️(PICK A CARD)❤️Does Your EX Have Any Regrets? Do They Miss You? 💏✨🔮Psychic Reading🔮✨

Searching For My Grail Watch (Part IV): Picking Up My A.Lange & Sohne - Lange 1 Rose Gold (191.032)

Searching For My Grail Watch (Part IV): Picking Up My A.Lange & Sohne - Lange 1 Rose Gold (191.032)

When you feel the music a bit too much...

When you feel the music a bit too much...

The Fifteen Billion Pound Railway Under Pressure, Over Budget S03E02

The Fifteen Billion Pound Railway Under Pressure, Over Budget S03E02

6 Great Modern Homes | WHATCH NOW ▶ 2 !

6 Great Modern Homes | WHATCH NOW ▶ 2 !

Zecora's Curse (Bridle Gossip) | MLP: FiM [HD]

Zecora's Curse (Bridle Gossip) | MLP: FiM [HD]

Emily wants to Play In Real Life Game (Dollhouse Mansion)

Emily wants to Play In Real Life Game (Dollhouse Mansion)

The Whispered Prayer of the Fearful | Hajj Mohammad Taleb

The Whispered Prayer of the Fearful | Hajj Mohammad Taleb

The Car Color Song + More Nursery Rhymes & Kids Songs - CoComelon

The Car Color Song + More Nursery Rhymes & Kids Songs - CoComelon

Opponents BEFORE and AFTER Fighting The Gypsy King

Opponents BEFORE and AFTER Fighting The Gypsy King

Process of Getting Braces

Process of Getting Braces

Kanye West- Famous ( 2016) audio with lyrics

Kanye West- Famous ( 2016) audio with lyrics

Koi Varieties List - Type of Koi

Koi Varieties List - Type of Koi

10 Weapons of WILD WEST You've Probably Never Heard of !

10 Weapons of WILD WEST You've Probably Never Heard of !

When To Buy and Sell in Day Trades: EatSleepProfit Beginner Lesson

When To Buy and Sell in Day Trades: EatSleepProfit Beginner Lesson

How to set effective goals and achieve them | how to stick to a goal | SMARTER goal setting

How to set effective goals and achieve them | how to stick to a goal | SMARTER goal setting

Iron Maiden - The Number Of The Beast Lyrics (HD)

Iron Maiden - The Number Of The Beast Lyrics (HD)

World's Worst Man-Made Disasters - Top Collection 10 - Engineering Disasters Documentary

World's Worst Man-Made Disasters - Top Collection 10 - Engineering Disasters Documentary

Baby Tin It's Usually Time to Drink the Milk, and It's Always Bad

Baby Tin It's Usually Time to Drink the Milk, and It's Always Bad

The Imminent Immanent Trailer | SGIFF 2018

The Imminent Immanent Trailer | SGIFF 2018

How to Embed an Airtable Form on Your Website

How to Embed an Airtable Form on Your Website

Mood - 24kGoldn ft. Iann Dior

Mood - 24kGoldn ft. Iann Dior

Frankie Lymon's Teenagers talk with Tom Meros

Frankie Lymon's Teenagers talk with Tom Meros

Chef'Special - Peculiar

Chef'Special - Peculiar

Understanding raga 3 Ornamentation& Phraseology

Understanding raga 3 Ornamentation& Phraseology

I got the new gloves in 20 cases, but then.. (1000 Broken Fang Case Opening)

I got the new gloves in 20 cases, but then.. (1000 Broken Fang Case Opening)

Best Pimple Pops of 2019, Biggest Zits, Whiteheads & Blackheads

Best Pimple Pops of 2019, Biggest Zits, Whiteheads & Blackheads

Silversea's Top Executives Take Delivery of Silver Origin in Rotterdam

Silversea's Top Executives Take Delivery of Silver Origin in Rotterdam

Dixie D'Amelio - Be Happy (Official Video)

Dixie D'Amelio - Be Happy (Official Video)

Dino Disaster!!! | Morphin Grid Monday | Power Rangers Official

Dino Disaster!!! | Morphin Grid Monday | Power Rangers Official

Dad's Army - The Two and a Half Feathers - NL Ondertiteld - ... take PFPF PFPF cover!...

Dad's Army - The Two and a Half Feathers - NL Ondertiteld - ... take PFPF PFPF cover!...