Is diversification for dummies?
If you’re into investing your hard earned money you have probably heard the terms “diversification”, “portfolio diversification”, or anything like that.
What is diversification?
Diversification is when you put your money in different investments; stocks, bonds, currencies, properties, etc.. In case you only invest in stocks then it’s when you buy the shares of company A, company B, company C, and so on. “Don’t put all your eggs in one basket!” they said.
Is diversifying my investments necessary?
Ask people who make money by investing, you’ll find mixed opinions about diversification. The truth is, diversification is probably one of the most misleading topic in investing. It’s just risk aversion.
Diversifying your investments can help soften the impact in case of losses within your portfolio. In other words, putting your eggs in more than one basket to compensate for lack of expertise. If you have five different stocks then you’d still make little profit when two of them are down and three are up.
My take on diversification
Splitting investment portfolio in ten different ways is not for everyone. If you’re not old as shit and if you have the capability to learn & to make solid financial decisions, why not just spend time to find one thing with the highest profit potential?
You have little need for diversification when your moves are calculated and based on careful research. Go full YOLO on a meme stock or a shit coin like a real retard coz why not, just make sure you have bullet proof conviction and balls of a steel.
Side note: We are in a weird time right now, economic is struggling but financial markets are booming. Who knows, market crash and financial crisis could be imminent.
Anyway best of luck in 2022! 🚀