Whether you're comfortable with a lot of risk or lean towards more safety, a properly diversified portfolio will help reduce your risk compared to a non-diversified one. A portfolio that's filled with a combination of stock and bond ETFs of various degrees of risk means it'll be better prepared for any number of situations the market throws at it.
A well-balanced portfolio strives for good returns with lower risk because it's more efficiently diversified across many asset classes. Depending on your preference for risk, a well-balanced portfolio offers you a higher expected return at that level of risk.
Comments