Savings and Investments


What does the saying “Don’t put all of your eggs in one basket” mean?

It demonstrates the principle of the need for diversification. If you put all of your investments in one stock, and if the stock price falls, you lose a significant amount of money. If you had put your money in three different stocks, and two of 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.


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