Building a balanced portfolio

Spreading picks across companies and sectors.

5 min · Beginner · Lesson 1 of 8

Step 1 of 4

What balance means

A balanced portfolio spreads money across companies that don't all react the same way to the same news: different sectors, different sizes, and different drivers.

One sector

Tech A, Tech B, Tech C, Tech D, Tech E

Spread out

Tech, Health care, Energy, Financials, Consumer staples

Technology stocks fall

One-sector portfolio0.0%

Spread-out portfolio0.0%

Each portfolio holds five equal picks. A simplified illustration: real stocks in different sectors still often move together on market-wide news.

See how the same bad news hits a concentrated and a spread-out portfolio.

For entertainment and education, not investment advice.