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.

Sep 11, 2008

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