Diversification

Don't put all your eggs in one basket

Not diversified

50 tech stocks

All move together in a selloff

One bad sector = big loss

Diversified

US stocks + international + bonds

Different assets offset each other

Smoother ride, similar returns

1

VTI or VOO: US stock market core (60-80%)

2

VXUS: International stocks (10-20%)

3

BND: US bonds (10-30%)

4

Rebalance once a year back to target

the portfolio

80% VTI + 20% VXUS is a perfectly good portfolio for someone in their 20s-30s. Don't overcomplicate it.

Check yourself

Which is more diversified?