Monday, October 5, 2009

Diversify, Diversify, Diversify

While this is not earth shattering or surprising advice, it is absolutely necessary in order to create an all-weather portfolio that can stand the tests of a volatile market. While risk takers usually try to avoid safety nets and opt for the far more exciting and profitable company of high risk returns, they will find that diversifying their portfolio cannot eliminate risk altogether. Rather, it is a matter of ratio. The extent to which they diversify their stock will be the extent to which rapid market fluctuations will not affect their total returns.

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