What are the common mistakes in portfolio diversification?
An example of an AI chatbot conversation about common mistakes in portfolio diversification.
What are the common mistakes in portfolio diversification?
Common mistakes include over-concentration in a few assets, ignoring asset correlation, and not rebalancing regularly.
Can you explain why over-concentration is a problem?
Over-concentration increases risk because if a single asset performs poorly, it can significantly impact your overall portfolio.
What should I do to avoid these mistakes?
To avoid these mistakes, diversify across different asset classes, regularly review your portfolio, and consider using index funds.
How often should I rebalance my portfolio?
It's generally recommended to rebalance your portfolio at least once a year, or whenever your asset allocation deviates significantly from your target.
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