That’s why personal finance experts recommend buying and holding low-cost index funds for the long term rather than trying to time the market with individual stocks. Index funds track the entire market (or sections of it) rather than individual companies, providing an easy way to diversify your portfolio and spread out risk.
For that reason, individual stocks should have a smaller allocation in your portfolio. “I personally recommend 80% of your portfolio in index funds and 20% in individual stocks as a starting point for your overall investments,” says Maggie Gomez, a Florida-based Certified Financial Planner and money coach.
