Describe how diversifying investments in different types of financial assets can lower investment risk.
Compare the risk faced by two investors, both of whom own two businesses on a beach. One investor owns a suntan lotion business and a rain umbrella business.
The other investor owns two suntan lotion businesses. Explain why a financial advisor might encourage a client to include stocks, bonds, and real estate assets in his or her portfolio.
Subject Area: Social Studies
Strand: Financial Literacy
Date Adopted or Revised: 04/15
Status: State Board Approved