Best Buy Co., Inc. (BBY), Apple Inc. (AAPL), Regeneron Pharmaceuticals Inc (REGN): How Should You Diversify a $10,000 Portfolio?

Best Buy Co., Inc. (NYSE:BBY) and Apple Inc. (NASDAQ:AAPL) are at two completely different ends of the spectrum in this “growth to value” cycle. Best Buy completed the cycle when its growth slowed and its stock slid from over $50 to under $15. At $50 it was too expensive, but at $15, it was too cheap. Now, investors can capitalize on its appreciation.

Apple’s hyper-growth model has slowed, and the market has responded negatively. But much like Best Buy Co., Inc. (NYSE:BBY), Netflix, and Green Mountain Coffee Roasters, the value present will eventually respond as gains. Hence, while technology and retail are two different industries — providing diversification — these two stocks are at different stages in their trade.

Why Regeneron?

Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is a part of the hyper-growth biopharmaceutical space, which is one of the most promising in the market. Biotechnology tends to trade apart from the market, meaning market direction doesn’t always dictate the performance of biotechnology; thus providing security.

Sure, Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is expensive at 14 times sales, but with a massive pipeline that consists of blockbuster products, Regeneron Pharmaceuticals Inc (NASDAQ:REGN)’s long-term outlook is still promising. Moreover, while Best Buy and Apple Inc. (NASDAQ:AAPL) provide value to your portfolio — although different levels of value — Regeneron Pharmaceuticals Inc (NASDAQ:REGN) gives you growth.

Final thoughts

The idea of “new age diversification” is for a portfolio to evolve with goals and worth. It is also the process of trying to include stocks that all serve a different purpose.

Best Buy Co., Inc. (NYSE:BBY) is a retail stock in the middle of an uptrend after transitioning from growth to value.

Apple Inc. (NASDAQ:AAPL) is a tech stock at the bottom of its trend while transitioning from growth to value.

Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is one of the hottest plays in biotechnology as a hyper-growth company.

Hence, if these three stocks don’t provide diversification to a small portfolio, then nothing else will!

The article How Should You Diversify a $10,000 Portfolio? originally appeared on Fool.com and is written by Brian Nichols.

Brian Nichols owns shares of Apple and Regeneron Pharmaceuticals. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.