[lhorie]

Depends on what you have in mind when you say diversification.

Easiest way to get started in other sectors is to google for stock analysis articles. They are written regularly for the major sectors and they will talk about the biggest/most interesting players, where they stand in the industry terms in recent developments, competitive advantages and risks.

With that said, dividing a portfolio across sectors isn't necessarily diversifying. Last year covid basically dragged the entire market down with it (and it's not exactly an anomaly for the entire market to swing in tandem). So if you're looking for resilience against that kind of risk you want to look into other investment vehicles (bonds, retirement funds, real estate, etc)

Or, if you're in the market for high risk asset types, but want things that do not track the stock market, you can consider looking into forex or cryptocurrencies (though beware, these are not for the faint of heart).

[ixacto]

COVID freaked out the stock market last year. Then it rebounded due to tech companies bring such a large part of the index. Residential real estate did great dispute COVID in some markets.

[vladojsem]

i would not call cryptocurrencies investing. and i would not recommend it to someone who is just starting / as the question suggest.

[lhorie]

I mean, there's a big difference between not being comfortable with a class of investment vehicles and something not being investing. Any asset whose value has the potential to appreciate can be considered an investment. For example, buying/selling businesses, physical gold, art and even rare pokemon cards are all forms of investment, albeit not mainstream ones. Stocks themselves can be just as speculative as crypto (GME comes to mind).

Besides, the OP is presumably interested in actively learning about the fundamentals of diversification, not merely asking for low-maintenance safe-ish portfolio options (in which case, buying an ETF would suffice). I'm just laying out different options across the entire spectrum. Personally, no one told me about virtually any of these options when I was starting out (presumably because they were similarly making assumptions about my risk tolerance level), but I wish they had. For example, reading about industry sectors is fine and dandy, but there's a subclass of stocks called dividend stocks that aren't a sector per se, but can be an investment strategy of its own. Index funds come up a lot in this type of discussions, but REITs do not, despite being pretty decent options as well. For crypto specifically, what almost no one mentions is that bitcoin is actually one of the more conservative crypto options compared to upstart altcoins. Etc. There's a lot of reading one can do across the board.

I'm very specific that crypto is not for everyone, but neither are things like shorting stocks, even though one might be more inclined to call shorting "real investing", whatever that means.