The Law of Diversification

Investing is a lot like life. There are a lot of risks involved. The risks we take usually yield the greatest of rewards. On the other hand, they can also initiate a complete downward spiral. All experienced investors will reveal the same piece of advice to avoid the two extremes located on each side of the spectrum. The solution can be summed up in one word – “Diversity.”

Diversifying your portfolio is the key to limiting risks and allows for greater opportunity to “succeed more safely.” Think about this concept and how it relates to your life. Are you playing it safe? Are you taking one big risk? Do you have a lot going on at once?

It’s not my place to suggest any of the aforementioned options. But looking at the history of successful investors (whom most had full-time day jobs aside from investing), one may suggest to divide your talents and passions amongst a few well-managed projects. That’s the law of diversification at work. You are bound to succeed with a lot of hard work and a little luck over time.