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Nice, thorough answer. You mentioned that : "of those at least 3 types of assets, never have 10% of more than any" Could you please elaborate on this? Suppos
by methusala8 8y ago
Nice, thorough answer.
You mentioned that :
"of those at least 3 types of assets, never have 10% of more than any"
Could you please elaborate on this? Suppose, I have x as my savings, should I invest only 30% of that in each of these and hold the rest in cash? Is that what you meant? Thanks.
- thiago_fm 8y agoIt is just a rule of thumb I created for the OP, you can create it as well for yourself any way you want. It just shows the importance of diversification and mitigation of risk, and real diversification, which means that you aren't diversifying between 5 oil companies stocks, but different types of assets, maybe even contradicting assets, so it hedges you a bit just in case one goes down, the other goes up. So tha greatly reduces the risk of the OP losing all his money(it can still happen) meanwhile give him some time to figure out things by himself.