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Old 08-25-2008, 03:19 PM
Canadian Canadian is offline
Senior Member
Join Date: Jun 2008
Posts: 415

You don't have to diversify, but is a smart thing to do for most investors. The idea is not to put all your money in a single company/industry/investment vehicle. Investing all your hard-earned money in a single company is risky, because if this company tanks then you will lose a lot of money. The same is valid if you bet all your money on a single industry - if this industry starts to struggle, then you lose again. The same is valid if you put all your money in single asset class, stocks for example. With the ongoing credit crunch most paper assets like stocks are not fairing very well.
Bear with me please
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