One of the biggest mistakes you can make in your portfolio is to fail to diversify.

Many people have much of their entire asset base locked-in to a single stock or industry that they are most comfortable with. And, they are unknowingly rolling the dice. Their portfolio is imbalanced.

Failure to diversify can put your financial picture at risk. If you are too heavy in an area that quickly becomes volatile, you may not be able to reallocate in time to salvage your investment.

Think it can’t happen? Go back to 2008 and 2009.

Diversification has never been more, well, diverse. There have never been more options to choose from, and conversely, there have never been less excuses to not diversify. It’s like a cardinal sin nowadays.

There are many ways to diversify. First, there are both debt and equity investment vehicles – stocks and bonds, if you will. Bonds are like loans that you make to corporations or to the government. In turn, you are promised both the return of your capital and some nice interest along the way.

You can buy stock in small companies or giant corporations. You can aim to grow your money or guard your money. You know, risk and reward.

You can invest in the US or virtually anywhere in the world. You can invest for a short period of time, like one single day, or in something that you hold for decades.

You can put your money into individual stocks or into funds, which are groupings of different stocks. You can choose stocks from different sectors or industries.

The ways that you can diversify your portfolio are limitless. Just make sure you do it. You’ll be glad you did.