Importance of diversifying your portfolio

A couple of US Stocks are plummeting : Fannie Mae and Freddie mac, they lost around 85% in a single day. And this is after having shed a substantial value contiuously over past few months. Now its turn of Lehman Brothers. Lehman brothers shares dropped by over 40% after it reported a loss of $3.9 billion. Today they again dropped by another 40%!.

There is a lesson to be learned from this. It is so important to diversify your portfolio rather than just buying one or two stocks if you want to minise risk.