Building a Simple Portfolio
Diversification is the only free lunch in investing
Why Diversify?
Don't put all your eggs in one basket. A simple portfolio spreads your money across different investments, reducing risk while maintaining growth potential. Even beginners can build a balanced portfolio in minutes.
How to Build a Simple Portfolio
The 60/40 Rule: A classic beginner portfolio is 60% stocks (growth) and 40% bonds (stability). As you get older or more risk-averse, you shift more toward bonds.
Use Index Funds: Instead of picking individual stocks, buy index funds or ETFs that track the S&P 500 or global markets. Instant diversification across hundreds of companies.
Rebalance Annually: Once a year, check if your portfolio has drifted (e.g., stocks grew to 70%). Sell some winners and buy more of what's lagging to maintain your target allocation.
The Numbers: Diversified vs Single Stock
| Scenario | Initial Investment | Return | Value After 10 Years |
|---|---|---|---|
| Single Stock (High Risk) | £10,000 | -50% to +200% | £5,000 - £30,000 |
| Diversified Portfolio (60/40) | £10,000 | ~7% avg | ~£19,700 |
A diversified portfolio smooths out volatility and delivers consistent, predictable growth over time.
Why This Matters
Building a simple, diversified portfolio protects you from catastrophic losses while capturing market growth. You sleep better at night knowing your money isn't riding on one company's success or failure.
Book a consultation and we'll help you design a portfolio that matches your risk tolerance, time horizon, and financial goals. We'll show you exactly which funds to buy and how to rebalance.
Book Your ConsultationImportant Investment Warning
This content is for educational purposes only and does not constitute financial advice. We are not FCA-regulated financial advisers. Investments can go down as well as up, and you may lose some or all of your capital. Past performance does not guarantee future results.