Without doubt, experts in the investment sector would not hesitate in stating that diversification is the key to successful investing. In fact, almost every successful investors in Singapore set-up portfolios that are broadly diversified. Nevertheless, diversification continues to be underestimated and undervalued by some other investors.
Instinctively, diversification matters. Good investors should not concentrate all their wealth in one form of investment.
Here is a crystal-clear example on the concept of diversification coming from the US Securities and Exchange Commission website:
“Have you ever noticed that street vendors often sell seemingly unrelated products – such as umbrellas and sunglasses? Initially, that may seem odd. After all, when would a person buy both items at the same time? Probably never – and that’s the point. Street vendors know that when it’s raining, it’s easier to sell umbrellas but ...
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