Diversifying the investments

 There is a case with saying that having a well-diversified portfolio is a sign of financial intelligence. People diversify their investments into different assets to increase the security over money. But this is commonly observed among experienced investors. Everyone starts with what generates high ROI. At the initial stages securing a well cashflow is less important than making a ton of money. These people lack emotional balance. When they see the asset price going on, they pour more money. They never allocate money for any other thing. Of course, they make a ton of money, on the flip side, if the market crashes these people go around like nuts. They totally fall under depression. Some may even choose to end their life.

Here comes the benefits of having a well-diversified portfolio. It is observed that when the price of one asset crashes, the other soars. By making investments in more than one asset keeps the overall portfolio preserved. With this kind of investment, we could see that we are always generating cashflows. It is good to remember “don’t put all of your eggs in one basket”. This is a principle rule obeyed by successful investors. It also applies to first-time retail investors.