Diversification means no single bet can sink your plan. Simple guardrails help:
• Position limits: avoid putting more than 10% of your portfolio in one company. • Asset mix: combine stocks and bonds in a ratio that fits your risk tolerance and timeline. • Rebalancing: once or twice a year, adjust back to your target mix to control risk.
Behavioral traps Chasing last year’s winners, concentrating in your employer’s stock, or ignoring fees can quietly raise risk. Use rules so you don’t have to rely on willpower in the moment.