Mistakes You Need to Avoid When Diversifying Your Mutual Fund Portfolio
Selecting the right assets to diversify your mutual fund portfolio can be quite tricky. You not only need to consider the returns but also need to analyze the risk factors and know if it fits perfectly with your financial goals. Have you ever asked yourself as to what is the basic tenet of managing mutual fund investments? Well, it’s diversification. Investors can add different types of investments to their portfolio to prevent a tandem movement of the overall returns. During volatile market conditions, the low returns from one asset can be easily cushioned with the high returns obtained by another. In simpler terms, spreading your hard earned money into different assets provides risk-reduction benefits. But, when diversification plays an important role in managing your portfolio, it is also important to choose the right assets that match with your goals. This being a very comprehensive task, there are chances for certain errors. Mentioned below are some of the mis