Money Management Principle: Don’t Keep All Your Eggs in One Basket
It is important to diversify your investment portfolio.
“Ship your grain across the sea; after many days you may receive a return. Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” (Ecclesiastes 11:1-2)
Diversification is an important wealth-building strategy that reduces risk.
Imagine if all your investments are in one place and that investment fails. The consequences could be dire, potentially leaving you in serious financial trouble. This is why it’s crucial to spread your investments across various assets.
Invest part offshore and part locally. Include cash, bonds, equities, and property. Invest across various companies. You can also spend money between short-term, medium-term, and longer-term investments to care for various objectives at different time intervals over your life span.
Related: An “Ancient Investment Strategy” that has stood the test of time
So, we should not keep all our eggs in one basket. Rather, spread your investments across geographical areas, asset classes, and investment vehicles and diversify across asset managers.
I suggest you get sound financial advice on how best to construct your investment portfolio in line with your needs and objectives so that you can achieve your financial goals while ensuring good diversification.
