Well, personally I used to be a ALL IN style investor. Why should we waste so many time and effort to invest in several stocks while we are allowed to choose the best one and all in? However, over the time with more investing experience, the ALL IN strategy doesn't sustain throughout our whole investment journey. If we ALL IN, we are not allow to make any single mistake else we will catch by a big Hit! [Spurting] [Spurting] [Spurting] [Happy] [Happy] [Happy]
Even though we are 100% sure that the company is doing well, but we never know if there will be any unexpected black swam issue that might simply cause the stock to plunge suddenly. So, by diversify your portfolio, you distribute the potential risk and it is more sustainable to invest this way in long run. [Observation] [Observation] [Observation]
Diversification is a risk management strategy that creates a mix of various investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt to limit exposure to any single asset or risk. [Evil] [Evil] [Evil]
Studies and mathematical models have shown that maintaining a well-diversified portfolio of 25 to 30 stocks yields the most cost-effective level of risk reduction. Investing in more securities generates further diversification benefits, but it does so at a substantially diminishing rate of effectiveness.
Diversification is most often done by investing in different asset classes such as stocks, bonds, real estate, or cryptocurrency. [Call] [Put] [Call] [Put] [Call] [Put]
Diversification can also be achieved by purchasing investments in different countries, industries, sizes of companies, or term lengths for income-generating investments.
I am more towards Diversification in investing right now. Which type of investors do you belong to? Kindly leave your review below.
@TigerStars @CaptainTiger @MillionaireTiger @TigerClub
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