{"id":3914,"date":"2018-12-08T09:00:16","date_gmt":"2018-12-08T03:30:16","guid":{"rendered":"http:\/\/capitalante.com\/?p=3914"},"modified":"2019-02-27T19:33:32","modified_gmt":"2019-02-27T14:03:32","slug":"how-to-diversify-stock-portfolio","status":"publish","type":"post","link":"https:\/\/capitalante.com\/how-to-diversify-stock-portfolio\/","title":{"rendered":"How to Diversify Stock Portfolio"},"content":{"rendered":"

During the discussion of asset allocation strategy, we have discussed how you can diversify your investment portfolio among the different asset class like gold, equity, bonds, and debt instruments with the asset allocation strategy. Asset allocation strategy enables an individual investor to diversify or mitigate the risk by making an investment in different asset classes. It also delivers decent returns according to an individual\u2019s risk appetite and time horizon. In this column, we will discuss how to diversify stock portfolio which may help you to mitigate the risk and deliver decent returns.<\/span><\/p>\n

How to diversify stock<\/g> portfolio and its benefits<\/span><\/strong><\/h6>\n

The basic investment strategy is that while you invest in the stock market you need to invest in those stocks or sectors whose business model is clear to you i.e., how the company earns money, whether it will exist after 20-30 years, the risk factors associated with the company etc. The next thing is to consider the market capitalization of different sectors such as Banking, Information Technology, Finance, Pharmaceuticals and health, Auto, Petroleum, Power, and Engineering etc. At the time of choosing sectors, all you need to do is to focus the mother sectors like the above-said sectors which will be there even after 100 years. Then you must analyse<\/g> the factors like the business model, financial health of the sector i.e., the debt burden on the sectors, future opportunities.<\/span><\/p>\n