Investors looking to diversify their portfolios should exercise caution if they are considering adding Brazil-based financial services giant Banco Bradesco (BBD). The stock has grossly underperformed broader indexes, such as the S&P 500, over the last 10 years, burning investor wealth in the process. Read on.One of the most important concepts for successful investing is portfolio diversification. In the event one has $100 or even $100,000 to invest, one needs to apportion investment capital according to risk appetite and gain exposure to multiple asset classes, such as equities, bonds, gold, real estate, and cryptocurrencies.
Further, one’s stock exposure should include companies across sizes and sectors. For example, a blue-chip large-cap company such as Verizon (NYSE:VZ) will offer investors a generous dividend yield. In contrast, a growth stock like Roku (NASDAQ:ROKU) will help grow wealth at an attractive rate over time.
One can also diversify a portfolio by purchasing shares of companies such as Banco Bradesco (BBD) that have a bulk of their operations in another country, further diversifying overall risk. So, let’s see if Banco Bradesco stock should be part of one’s portfolio right now.