Diversification is The Key To Wealth Creation

Wealth creation is not as simple as watching a T.V, infact we fight for watching T.V Channels between our housemates. While we have lot of T.V channels, some of us like sports channel, some likes serials, some likes news while some prefer reality shows. All the modes are available in T.V itself just we have to select best mode, then why not in investments?

Like sparing some time to watching news and serials, we should diversify your money to all sectors While investing irrespective of your personal interests.

We often see people bound to some “Personal Interests”. Some prefer to invest in gold, some likes real estate, some likes shares while some likes traditional investments. Though we might be fond of particular asset class we should not let all our money pour into one asset class, instead we should diversify to all of them.

We should take care to make our investments inversely-proportional to risk . By diversifying if one asset class slips, the other asset class should protect you from capital erosion. That is the main theme of the “Diversification”

Do remember the famous quotation- “Don’t put all your eggs in one basket“. This rule is strictly followed by successful investors and so they created wealth, then why not you? When you closely observe legendary investors investing style they diversify their wealth among various asset classes. Ofcourse their risk appetite might not suite you, but do remember their “Diversifying” nature makes them wealthy.

If you want to create wealth to your family, first analyse your risk profile and do proper asset allocation. Asset Allocation ensures proper diversification of your capital and rewards you in turbulent times. But do remember your asset allocation should be inversely proportional, if one asset class slips, the other would generate positive returns and hence you would be in safe side. Then only you can create wealth.

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