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Diversify Your Portfolio
"Diversification is key. You should be putting a little bit of money in a lot of places." — Ric Edelman
Do you really understand what your investments are doing? Here are some simple steps to help you build a stronger and safer portfolio. Keep in mind: this is general advice. Please consult with your own financial advisor before investing or making changes to your portfolio. 
See an example of a diversified portfolio.
Give Your Portfolio a Makeover 1. Diversify This is Ric Edelman's favorite piece of advice! As you begin your investment strategy, consider the investment choices available to you. Stock mutual funds will make the most money over a 20-year investment career. Government bonds and fixed funds will return a small but consistent profit. Ric says the combination of funds you choose doesn't matter, as long as you stick with investing from now until retirement. 2. Do NOT Invest in Individual Stocks Pick stock mutual funds within your plan, not individual stocks. Ric also advises against buying stock in the company you work for. "[After Enron,] that's the lesson for all of us. So many employees are buying their company stock, and they do it to the exclusion of all else. Do not buy company stock. And if you're going to, don't buy much at all." 3. Invest in All Sectors of the Economy Ric says one of the big mistakes people make when they are buying stock mutual funds is that they only buy a fund that invests in one sector, like dot coms. "What you want to do is invest in all of the sectors of the economy," says Ric. "That diversification provides safety. You should have twelve eggs in twelve different baskets. There shouldn't be any big bets in your portfolio."
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