With turmoil hitting markets overseas lately, Jim Cramer reviewed the necessity for geographical diversification in a portfolio. And he doesn't mean just picking stocks based on international exposure by sector.
Over the years, Cramer learned that the traditional way of diversifying — picking stocks using industry sectors — is no longer going to work. A new world with new challenges requires a new way of categorizing stocks.
Thus, he recommended a diversified portfolio consisting of high-yielding stocks, growth stocks, speculative stocks, gold and stocks from a healthy geography.