Description: Partner In Your Wealth Creation Journey!
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Portfolio Creation: - Investing in one or more asset classes or securities. Creating portfolio helps in protecting the downside and avoiding extreme unpleasant results.
Diversification is an investment strategy that mixes various asset classes or securities to reduce risk and maximize profits. It helps in reducing risk. Risk can be lowered but cannot be eliminated. It helps in avoiding extreme results.
Investor should analyze whether a new security to existing portfolio is adding to portfolio risk or lowering it without compromising the return. If it adds to risk than it should be avoided for investment. Generally, risk is measured in term of standard deviation.