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Not investment advice. Educational reading. See Disclaimer.
L.1 · BEGINNER · 2 MIN

Diversification: Don't Put All Eggs in One Basket

Owning stocks across different sectors reduces risk. If tech crashes but healthcare holds up, your portfolio is protected.

Quiz · 5 questions ↓
§ 01
SectorRisk ProfileExample Companies
TechnologyHigh growth, high volatilityApple, Microsoft, Nvidia
HealthcareDefensive, steady demandJohnson & Johnson, UnitedHealth
FinancialsCyclical, rate-sensitiveJPMorgan, Goldman Sachs
Consumer StaplesDefensive, low growthCoca-Cola, Procter & Gamble
EnergyCyclical, commodity-drivenExxonMobil, Chevron
§ 02

The S&P 500 has 11 sectors. A well-diversified portfolio touches at least 4-5. Concentration in one sector is a bet, not a portfolio.

§ 03
Go to the **Portfolio** view and check your sector exposure in the donut chart. Are you concentrated in one sector?
§ 04
Your portfolio is 80% tech stocks. What is the biggest risk?
§ 05

Diversification is the only free lunch in investing. It reduces risk without necessarily reducing expected returns.

Five questions · AI feedback

Sit with the ideas.

Your portfolio is 80% tech stocks. What is the main risk?

Why:
Try this in paper trading

Build a 3-ETF starter portfolio

Allocate $25,000 of your paper cash across three ETFs: a broad-market index (e.g., VTI or SPY), an international fund (e.g., VXUS), and a bond fund (e.g., BND or AGG). Pick the weights you'd actually hold for the next decade.

Open paper portfolio →

Practice mode — simulated trades, not investment advice.

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