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Tackle Today: 3 Steps to a Diversified Portfolio

January 20, 2023

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Building a diversified portfolio doesn’t need to be complicated. You can do it in three steps.

First: Decide what asset classes you want exposure to. Your choices include stocks, bonds, real estate, gold, oil, and bitcoin. In considering the options, look at their historical return profile and volatility. Your risk tolerance and investment objectives matter too.

Second: Decide what percentage of your account you want to allocate to each. Remember, the higher the percentage, the more impact the asset will carry in your portfolio. For most traditional investors, stocks get the lion’s share of the exposure because of their reliable long-term returns. Bonds and gold are mostly volatility reducers. Real estate returns have been respectable. Bitcoin is a lottery ticket with epic booms and busts. And oil further diversifies your basket.

Third: Decide which ticker symbol to use for each asset class. For stocks, you might use SPY or VTI. Bonds could be AGG. Real estate includes VNQ, USRT, and XLRE. Gold could be GLD or IAU. You can buy bitcoin directly or use BITO to trade options around it. Oil might include XLE, XOP, or USO.

Chart of the Day: Cameco (CCJ)

Cameco (CCJ) snapped back aggressively after Wednesday’s whack. It’s attempting a breakout this morning.   

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