We’ve all heard the expression “do not put all your eggs in one basket”. This saying is a perfect example of the principles of diversification. Diversification is the idea of spreading your money across different investments (stocks, bonds, real estate, etc.), preferably those with no/limited correlation. The idea here is that the overall stock market is volatile and filled with unexpected outcomes. Diversifying, or separating your eggs into different baskets ensures that in volatile economic times, your investments are not all acting in the same way. If you drop one of your baskets, you’ll still have other eggs to make an omelet- similarly, due to having a variety of investments, one of your underperforming securities won’t significantly impact your portfolio.
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The information provided in this blog is for general informational purposes only. It should not be considered as personalised investment advice. Each investor should do their due diligence before making any decision that may impact their financial situation and should have an investment strategy that reflects their risk profile and goals. The examples provided are for illustrative purposes. Past performance does not guarantee future results. Data shared from third parties is obtained from what are considered reliable sources; however, it cannot be guaranteed. Any articles, daily news, analysis, and/or other information contained in the blog should not be relied upon for investment purposes. The content provided is neither an offer to sell nor purchase any security. Opinions, news, research, analysis, prices, or other information contained on our Blog Services, or emailed to you, are provided as general market commentary. Sarwa does not warrant that the information is accurate, reliable or complete. Any third-party information provided does not reflect the views of Sarwa. Sarwa shall not be liable for any losses arising directly or indirectly from misuse of information. Each decision as to whether a self-directed investment is appropriate or proper is an independent decision by the reader. All investing is subject to risk, including the possible loss of the money invested.