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Tag: investing

To diversify or not?

In investing, there is a concept called diversification. It means all of one’s money shouldn’t go into just one investment. This is because such concentration increases the risk of loss. If all eggs are in one basket and the basket has a hole, then you are unlikely to get omelette for breakfast the next morning.

Diversification is helpful in life in general as well. It is good to have a good friends circle, and a trove of important relationships – maybe at least one lawyer, doctor, accountant, engineer would help! It is also good to have multiple income streams, rather than just depend on one salary. This has become easier in the digital age, with social media providing plentiful options to supplement one’s primary income.

A few generations ago, couples used to have 8-10 kids in order to diversify. While planning a vacation, it would be better to go to your spouse with 3-4 alternatives, rather than just going with one pre-decided choice, especially if she/he is not in a good mood. Ditto for taking some presentation templates to your boss!

One place where diversification is less useful, is when it pertains to spirituality. The ancients say it is best to have extreme focus. One Guru only. One Lord only. No supermarket shopping for either Gurus, or deities, or scriptures, or religions. All Truths are one and the same. No deviation, no diversion, because there is no need for it.

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