Principles of diversification : vimarsana.com

Principles of diversification


THE STANDARD
African American woman holding dollars [Courtesy]
Any investor worth their salt will tell you that one of the worst mistakes you could ever make is pouring all your money into one investment. ‘Don’t put all your eggs in one basket’ is an adage popularly used and one that still rings true.
Why is this? You ask.
Well, two reasons actually.
First, so that you’re not severely affected by market swings. And second, so you are able to optimise your returns.
If your only investment was in popular stock, I believe you’d have wanted to keep other types of investments, such as treasury bonds, which would have ensured that you offset any stock market losses you incurred due to the pandemic. However, determining the right mix of investments is not easy.

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