Introduction to Personal Investing
What does the saying “Don’t put all your eggs in one basket” mean?
It demonstrates the need for diversification. If you put all your investments in one stock, and the stock price falls, you lose a major amount of money. If you had put your money in three different stocks, and two of the three go up, and only one goes down, you could still have made money, or perhaps lose less money than if your investment was concentrated in one stock.