A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio. Source;Investopedia.
If you are new to investing probably you have n't done this strategy yet. This is a great strategy to minimize your risk. You should invest your money in different investment instruments in a balance way such as fixed income securities (bonds),real estate, mutual funds, uitf and vul.
If you put your money "All In" for one stock like a friend of mine in FNI, his bleeding more than 30%, a big mistake following gurus but if you put it on "NIKL" yesterday, you will be a winner of 18% gains. You are exposing yourself to 100% risks and might lose your hard earned money, if you are putting the capital in one basket.
Diversify into different money making machines;
Aug 25, index @ 6.621 level
|5,109 PHP Earnings|
Aug 28, index @ 7,098
|11,458 PHP Earnings|
TOTAL PASSIVE INCOME EARNINGS AUGUST = 74, 926 PHP
Diversification should be applied in managing stocks portfolio, you should not have more than 3 stocks in the same industry. It should be balanced, that will reflects on your day change during the downtrend.
Congratulations to those entered during the downtrend, I believed there will be another round, cautious buying is highly recommended.
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