Diversification - main investors ruleDecember 23, 2014 в 10:44
No one investor asks a question: What to put up money for? Because, everyone know - for the further profit. But, to put up money without risks it is necessary to consider some nuances. One of such nuances is diversification.
This term occurred from a newlatin word "diversificatio" - a variety, change and from Latin "diversus" and "facere". It means expansion of all production assortments and reorganization of commodity markets, studying of new principles of manufacture for increase in production efficiency, reception of good benefit and prevention from risks of bankruptcy. Today, many investors say that the diversification as a method of risk decreasing is effective enough. If simple diversification demands not to put all eggs in one basket, not to lose all eggs in case of unforeseen circumstances. Thus, there is an insurance of investment risks that is especially in modern world.
If you consider one variant of investment buying shares you are under group of risk. If it appears favorable, you get a big profit if it's not, you lose everything.
Even when, you calculated all risks of financial investment did the analysis and didn't find vital issues, it is necessary to remember that in any activity there are various problems which can ruin everything. When the estimation of investment risks will become, it is necessary to consider that there are natural cataclysms, political problems that is very difficult to predict and foresee.
If you ask skilled investor a question: Where to put up money without risks? He will respond: In everything!
Arguments and forecasts are studying at all meetings where millionaires and billionaires participate before making decisions on financing. But the most important feature that all forecasts which concerned various financial changes, are reduced to level of arguments which are based on certain information. For this reason, investment of money is difficult procedure that demands special attention.
Skilled investors invest money by a principle of diversification. They select various ways of investment hedge risks and make an information portfolio so that it components move opposite.
Thus, one investment presumably grows, second, most likely, will go down in price.