{"id":21,"date":"2015-09-30T03:57:54","date_gmt":"2015-09-30T03:57:54","guid":{"rendered":"https:\/\/kuverablog.wordpress.com\/?p=20"},"modified":"2019-06-10T09:32:47","modified_gmt":"2019-06-10T09:32:47","slug":"004-dial-d-for-diversification","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/004-dial-d-for-diversification\/","title":{"rendered":"Dial D for Diversification."},"content":{"rendered":"

Do not put all your eggs in one basket \u2013 that\u2019s diversification. Simple as that.<\/strong><\/p>\n

An investor should own cash, bond Mutual Funds, equity Mutual Funds, and real estate (residence). This is diversification – having investments in multiple financial instruments that provide different levels of risk and reward. Diversification reduces the risk in your portfolio \u2013 when some investments are down, others will be up. It is the same reason buying a Mutual Fund or a basket of stocks is better than owning only one stock. <\/em><\/p>\n

Ram is very proud of his company\u2019s employee stock option program. He likes his workplace so much he has all his investment in the company stock. There are a lot of people who do this. Globally there have been many instances where such blind faith has proved wrong with disastrous consequences.<\/a><\/p>\n

When times are good and your company is doing well, you will get promoted and get a pay raise. All the while company stock will keep going up, and you will feel like a rock star. But when times turn bad, you may lose your job when the company stock price is falling, and you will feel sad. That\u2019s the problem with putting all your eggs in one basket (in this case your employer), you are dependent on that one basket performing well.<\/p>\n

Think of diversification as a the different spices in a spice box. Its only when all the spices come together in the right proportion that you have a tasty meal.<\/h4>\n

\"\"<\/p>\n

People have known about diversification for a long time:<\/p>\n

In the bible:<\/strong><\/em><\/span>
\nBut divide your investments among many places,
\nFor you do not know what risks may lie ahead.<\/p>\n

Shakespeare:<\/strong><\/em><\/span>
\nMy ventures are not in one bottom trusted,
\nNor to one place; nor is my whole estate
\nUpon the fortune of this present year:
\nTherefore, my merchandise makes me not sad.<\/p><\/blockquote>\n

We all practice some form of diversification, especially in cash management. Think about it, we keep money in a few bank accounts (if one bank goes under we won\u2019t lose it all), or save cash in a few different places (if one spot gets robbed we won\u2019t lose it all). That is diversification too.<\/p>\n

So that leads to the question, how much should one diversify? As a rule of thumb an individual should have investments in multiple asset classes (equities and bonds through mutual fund, real estate etc). Within equities an investor should have investments in domestic (Indian) as well as international (US, Europe etc) mutual funds. Test your diversification mojo here.<\/a><\/p>\n

Now that we know we should diversify our investment portfolio, how much of which asset should we buy? For that read about asset allocation<\/a>.<\/p>\n

Visit www.kuvera.in<\/a> to invest in “Direct Plans” of Mutual Funds and save BIG on commissions!!!<\/p>\n","protected":false},"excerpt":{"rendered":"

Do not put all your eggs in one basket \u2013 that\u2019s diversification. Simple as that. An investor should own cash, bond Mutual Funds, equity Mutual Funds, and real estate (residence). This is diversification – having investments in multiple financial instruments that provide different levels of risk and reward. Diversification reduces the risk in your portfolio […]<\/p>\n

Read More…<\/a><\/p>\n","protected":false},"author":2,"featured_media":715,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[91],"tags":[7,8,9,11,14,19],"yoast_head":"\nDial D for Diversification. - Kuvera<\/title>\n<meta name=\"description\" content=\"Diversification reduces the risk in your portfolio \u2013 when some investments are down, others will be up.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kuvera.in\/blog\/004-dial-d-for-diversification\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dial D for Diversification. - Kuvera\" \/>\n<meta property=\"og:description\" content=\"Diversification reduces the risk in your portfolio \u2013 when some investments are down, others will be up.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/kuvera.in\/blog\/004-dial-d-for-diversification\/\" \/>\n<meta property=\"og:site_name\" content=\"Kuvera\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/kuvera.in\" \/>\n<meta property=\"article:published_time\" content=\"2015-09-30T03:57:54+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-06-10T09:32:47+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2015\/09\/Screen-Shot-2017-05-06-at-9.46.16-AM.png\" \/>\n\t<meta property=\"og:image:width\" content=\"612\" \/>\n\t<meta property=\"og:image:height\" content=\"300\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Gaurav Rastogi\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:site\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gaurav Rastogi\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Dial D for Diversification. - 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