5 tech stocks to diversify your portfolio

Building your investment strategy from the ground up is vital; you can start with these 5 stocks.

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Many investors know the best way to keep profits running and minimise losses is to diversify a portfolio. This doesn't necessary mean buying different amounts of different stocks. This can also mean buying stocks from different countries and putting funds into different asset classes like property or even keeping some in cash for the proverbial rainy day.

Here are five stocks that will help you diversify your portfolio and get on your way to financial freedom.

1. Telstra (ASX: TLS)

Telstra is one stock that will help investors with great dividends and solid revenue gains. The number 1 telco has enjoyed a fantastic run-up in share price over the past two years but it still holds great long-term potential. Although there are uncertainties surrounding the NBN and its lucrative copper network, Telstra has some booming businesses as well. The company is listed on multiple stock exchanges.

2. Apple (NASDAQ: AAPL)

Apple needs no introduction, but perhaps it's time to consider it once again. It has falling from spectacular highs over the past year and some investors have realised what a bargain it could be. In the past three months, the stock has rallied over 21% to $487 per share but is still far off its highs of around $700 this time last year.

3. Microsoft (NASDAQ: MSFT)

Microsoft is perhaps the safest company on the planet. Its programs and services have become engrained in 21st century society. Popular devices owned by Microsoft include Windows, Office, Surface, Windows Phone, XBOX, Skype, Bing and huge amounts of business critical software and hardware. The company trades on an earnings ratio of 13 and has a market capitalisation of $279 billion.

4. Cochlear (ASX: COH)

Cochlear is considerably smaller than the previous three companies on the list but its technology and geographical presence make it a perfect addition to diversified portfolios. The share has fallen considerably since the start of the year but its new implantable hearing device, the Nucleus 6, is set to drive revenues higher in the near term. Cochlear draws 42% of revenues from America, 17% from Asia Pacific (APAC) and 40% from Europe.

5. Newsat (ASX: NWT)

No diversified portfolio would be complete without a small, speculative growth stock. Newsat is arguably the most geographically diversified company on this list. It owns and operates satellites that provide critical services to the Australian government and businesses but also a range of international customers including US government assets in the Middle East. With a market capitalisation of only $263 million, this is one stock to look out for.

Foolish takeaway

These five stocks are great at what they do but they're not without risks. Diversifying across multiple markets, industries and assets is one of the best ways to make money but chip away at the downside risks. Buying the best stocks at great prices is an even better way.

If you want an even better stock to add to your portfolio, we think we've found it. Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

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Motley Fool contributor Owen Raskiewicz owns shares in Cochlear.

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