Eggs, Baskets, and Diversification

It’s almost Easter and many of us have thoughts of eggs and baskets running through our heads. Everyone’s looking forward to enjoying a little chocolate and some quality time with family and friends. In terms of finance, however, we often speak of eggs and baskets in the context of diversification.

Diversification means spreading your investments among asset classes that are less correlated with one another. You can put some of your money in stocks, some in bonds, commodities or real estate. The idea, of course, is that if one asset class is hit with a large decline the others will either rise or stay the same, cushioning the blow to your overall portfolio.  Read More…

This article has 8 Comments

  1. Zeke

    Say all you want but the average person lets greed get the better of them which makes it hard for most to properly invest.

  2. Curt D.

    Even with diversification one can experience large losses over the many years of holding them. The real goal is holding them for the long-term. Not just diversification.

  3. Kareem

    REITs are the best options for diversity. Most dont realize their benefits.

  4. Alfie W

    I’ve only diversified my portfolio when it comes to my money i actually need for the long term. So things like RRSP are very diversified.

  5. Christo Pier

    There is no fun in playing it safe and that is what diversificaton is like. Yes it is a good strategy but it is a safe bet that doesnt make much in returns.

  6. Zachery

    Great article! I am new to all this and advice like this was handy.

  7. Dale Overman

    The best places for diversity is in the ETF realm. With low cost MER% one can put together a fantastic list of buys.

  8. Quentin Getchins

    I personally think the younger you are the more you can be more risky and invest in specific sectors.

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