Diversify or be defenceless

When we talk about mutual fund investments and the benefits an investor derives from them, we list out a lot of advantages. However, the one that stands out above the rest is diversification. The theory of diversification is very simple. All investments don't do well simultaneously. The normal state is for some investments to do well and for others to not do as well or to even perform badly at a given time. If you happen to be over-invested in something that is performing poorly at a given time, then you are going to have a problem. The promise of diversification is that it saves you from the unfavourable performance of a narrow set of investments. If a particular company or sector is s

This article was originally published on August 26, 2021, and last updated on November 25, 2022.