Why is diversified investments important?

Why is diversified investments important?
Small, medium, or large caps, invest in stocks and bonds is nothing "wrong" there. But this is not to diversify your investment is not automatic.
Small, medium, provides a diverse set of titles like possess large-cap stocks.
You may ask yourself "[OK] Now, the question is then what is?"
Flat plate, you could have all 10 types of vegetables of different colors and textures: it is, please consider this approach. But in general, is still full plate of vegetables.
All vegetables taste too different. Again, it is already full plate of vegetables only.
Has a healthy body for (portfolio diversification), to have you exercise (investment approach and on the basis of decision making), along with other food groups (asset class) is required.
The stock market is called the stock a single asset class. Uiriamuoniruzu in the book of "how to make money in any action," was all three of the four marks of the "market" describes a phenomenon that, according to historical trends.
75% of the shares which means moving in the same direction as the overall market index, please see the news every night.
The stock market goes down, the majority of the stock market, regardless of their intermediates, whether small or large cap fall.
The good news is that, when the stock market is down is that there are other asset classes tend to go away.
I may seem a large number of stocks for diversification of another, is still a collection of stocks. The point of diversification, asset classes that have the money to move up and down at different times Factors influencing the diversification
Here is the hard part, answer the question "You have to diversify," ... depends. Technically it is, financial adviser, when the pitcher a portfolio of stocks and bonds, the reasons for diversification, but only a very narrow range ... ..
How can I make various investments?
Diversification (different asset classes you choose) to use a different class of asset allocation (to calculate how much money in each asset class), spread your money between the position sizing.
Life insurance and investment has been prepared as there is only one way to pass both. As part of the investment process safety, to reduce the risk.
Having your money in various asset classes to reduce the risk of loss to cancel your class of assets. This is all the asset classes that move in the same direction at the same time because there are very few times