Thursday, July 1, 2010

Diversification is important while investing

Do not put all the mangoes in the same basket. It may damage the whole one. So,diversification is important here. Same thing is applicable while investing.

Diversification is the core word in investment. Most of the successful investors are making their portfolio which is widely diversified. I think every investor should do this.

So, invest your money not only in one stock distribute it among purchasing bonds, in money market accounts & also in real estate. It is simple to understand if you will put all money in only one equity & if that is go down then your full investment will go under huge loss.

If you are interested in equity investment then diversify your funds in different equities instead of one. Then may be one or two is going down but your investment amount will not go down because rest of the equities will support you. so, in the crisis period also you can expect good return from your investment.

So, diversification is the keyword to get success in this finance industry.

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