How and Why to Diversify Your Portfolio

How and Why to Diversify Your Portfolio

Alex Michalka, PhD and Fang Rui, CFA

Many investors think they have a well-diversified portfolio when, in reality, they don’t. In The Elements of Investing, Burton Malkiel (Wealthfront’s Chief Investment Officer) and Charley Ellis (noted investor, author, and member of our investment advisory board) outline the three dimensions of diversification you need to improve your chances of long-term investing success.?

The three ways you can (and should) diversify your portfolio are:?

  1. Across assets
  2. Across asset classes
  3. Across time

Let’s take a closer look at how to apply this to your portfolio.?

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Nothing in this communication should be construed as tax advice, an offer, recommendation, or solicitation to buy or sell any security. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Investment advisory services are provided by Wealthfront Advisers LLC, an SEC-registered investment adviser, and brokerage products and services are provided by Wealthfront Brokerage LLC, Member FINRA/SIPC.

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