HEARTH & HOME
Put All Your Eggs
in One Basket
By Donald Broughton
O
ne of the well-worn axioms of investing is
diversification.
We have all heard repeatedly that diversification is a
great way to lower the risk of investing. In principal, it
is true that if you “don’t put all your eggs in one basket,”
you lower your risk. If you are invested in a number of different sectors
in the stock market, it should lower the risk of investing in the stock
market. If you are invested in real estate, stocks, bonds, commodities,
a private business and art (or other investable collectibles), then it
should lower your overall risk.
The theory is rather straightforward: One of those investments
may go down, but they won’t all go down at t