We all know the age-old saying:
“Do not put all your eggs in one basket.”
Diversification is the process of investing your money in different assets.
Why Diversify?
The reason one should diversify by investing in different assets is to protect oneself from loss arising from fall in value of any one or more assets. As the returns of the different assets may not fall together, a fall in the price of one asset may be compensated by a rise in the price of another asset thereby safeguarding one’s investments from losses.
Disclaimer : This message is presented as a reading and teaching material with a sincere purpose of making the reader financially literate. It is not intended to influence the reader in making a decision in relation to any particular financial products or services.
Printed by Reserve Bank of India, Financial Inclusion & Development Department.
