Diversify

Diversification is key when it comes to investing.

Having all of your money invested in one company or one industrial sector, such as computer technology or energy, is a quick way to lose a lot of money. Sectors of the market often move together. You may experience devastating losses if something happens in the real world and all of your money is in an affected sector.

Here’s how you can diversify your portfolio:

• Invest in at least three different industries to begin with.
• Choose different-sized companies to invest in.
• Invest in both foreign and domestic companies.