Thursday, December 27, 2012

Financial Food for Thought (Diversification)

What is Diversification?
  In the investment world, diversification means to invest your money into a variety of investments to help reduce risk. Which means you should never place all of your eggs (money) in one basket (investment) because if something negative happens to that basket (investment) then you'll lose everything (all your money). Instead you should diversify your investment portfolio by investing in a variety of investments such as stocks, real estate, bonds, etc.
Unfortunately the average person don't have enough money to invest into a variety of investments. However, this is why mutual funds were created. A mutual fund will give an average person with a small amount of money an opportunity to invest into a diversified investment portfolio. If you would like to create a diversified investment portfolio but you don't have a lot of money, please visit
Make Money Work for You (Investing in Mutual Funds) to learn more about Mutual Funds and how investing in them can benefit you.


  1. For more elaboration on what is diversification, try to read this article "A Look at Diversification." Just like you've pointed out, it also tackled the concept of diversification is on why mutual funds and Exchange Traded Funds are so popular among investors.