In a hypothetical example, given someone who has average risk tolerance, and that person needs to diversify, explain how the effects of portfolio risk for average stocks should impact their future investment decisions and why. Please show how this person should strategically invest their money if they have 100,000 in the bank to invest and they needed to diversify their portfolio.
Given: A person today has 100,000 today in a savings account and they want to invest their money in a diverse strategy over a period of 20 years. How can they maximize their money. Pretend it was you. Would you put it all on one fund or would you use have it split among a few. Which ones? What would that 100,000 today look like in 20 years.