While immense wealth can be created through concentration, it is not a rule and diversifying investments is the best way to protect and grow money. Equity, bonds, precious metals, commodities, real estate, currency, and alternatives are the seven asset classes that can help diversify portfolios. Mutual funds offer different funds, providing an easy way to get exposure to many of these asset classes. The allocation of these asset classes should depend on an investor's goals, time horizon, and risk appetite. Owning a few asset classes like equity, fixed income mutual funds, gold/silver, and real estate/REIT offers adequate diversification.
