What this unit covers
Take diversification into real portfolio building: how many holdings, and how spread out, is enough without being excessive.
By the end you will be able to
- Explain why diversification can fail from too few holdings or too many.
- Judge a portfolio by whether every holding can be explained, not by its count.
- Identify when adding a holding adds real protection versus untracked exposure.
How it starts: The Eighteen Holdings
- You open your broker app and count eighteen stocks and funds.
- You try to say why you bought each one in a single sentence.
- You reach the fifth holding and cannot remember your reason.
Words you will meet
- Diversification
- Spreading money across different investments so one bad outcome does not wreck the whole portfolio.
- Concentration risk
- The danger of losing heavily because too much money sits in one holding.
- Over-diversification
- Owning so many holdings that you can no longer track or explain what you own.
In this module: Building Your Portfolio
- Asset Allocation
- Diversification Done Right (this unit)
- Position Sizing
- Rebalancing & Staying With the Plan
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