But diversity goes beyond just a mish-mash of different of asset classes.
Geography is another way to cover all your bases –– and it's a lot easier than you might think.
U.S. News & World Report's Miranda Marquit outlines three simple ways to get into the foreign investing game:
1. Try seeking out foreign companies listed on U.S. exchanges.
Why: It's easier to go through U.S. channels if you've got your eye on a hot foreign company.
2. Take advantage of low-cost index funds.
Why: They're cheaper, for starters, and index funds or exchange-traded funds (ETFs) give you access to a host of asset classes you might not otherwise be exposed to. Just pay close attention to your risk tolerance –– not all funds are created equally.
3. Consider REITs.
Why: If you're too squeamish to commit to plucking up property in foreign real estate markets, REITs might be the answer. They are real estate investment trusts that focus on foreign properties.
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