Diversification: The art of putting your eggs in more than one basket

A fundamental rule to follow when you invest your money is to diversify your investments.

A good way to lower risk is to spread your money among a variety of investment products instead of putting it all into a single investment.

Another good way to diversify your investments is to invest in several companies, industries or areas of the globe.

Planning involves having a good game plan and sticking to it. Your plan should include:

  • How long you want to invest for
  • The return you expect
  • What actions you’ll take if your investments fluctuate.

With a good game plan, you’ll be less prone to react emotionally to steep market gains and losses.

Insight

Do you know the Rule of 72?

Calculate how long it will take for your investment to double.

End of the insight