Category: Money Tips Date: 2005-12-25
"Do not put your eggs in one basket" is a financial planner's advice. Some people also think that this is the wrong conception of personal finance that investment should be recommended, as Mark Twain: "put all your eggs in one basket, and then carefully optimistic about it."
Is a good diversification, or concentration of a good investment there has been no controversy out of it herself. As the investment itself is a very complex problem items, all kinds of investment in the product itself has been the degree of risk and return different degrees, it is difficult to have a recognized investment in a unified reference model as a benchmark to be.
Take for example diversification, the general distribution of personal assets invested in savings, bonds, funds, real estate, gold, stocks, calligraphy and painting works of art and even venture capital, etc., totally different to see each individual's degree of risk aversion or preference to distinguish between the . Most investors tend to savings and bonds is due to its safety, but because China's current low level of interest rates, relying on savings, the return value is clearly unable to meet the hedging needs.
The real estate and precious paintings and other works of art antiques barriers to entry are relatively high, investors are unattainable for the average state. So in a period of time, to the pursuit of a relatively high rate of return of funds, stocks with lower barriers to entry is undoubtedly one of investment products. Although the level of risk the stock higher, but where there are high rates of return of investment products, usually accompany the high-risk, wealth and risk in order to not only safer, but also high-return varieties has always been non-existent, at least for the Ordinary investors in terms of the case.
In fact, after the stock market entered into the capital account for the proportion of personal or family property, for different investors are not the same. If the access is extremely small part of the assets, then the pursuit of high-risk high-profit impact of the so-called speculation by itself is not large, because the vast majority of assets invested in a safe investment products, to enter the stock market a very small proportion of the funds to conduct a very fragmented investment, such as buy a lot of stocks, not only energy is limited, while profit was not guaranteed. On the contrary, if the funds into the stock market accounted for most of the proportion of individuals or families, then the appropriate degree of diversification of investments and the pursuit of security to invest in blue-chip companies, is to avoid the risk of self-protection measures.
Whether it is putting all their eggs in one basket Ye Hao, or putting all their eggs in different baskets Yehao decided not to allow the basket of eggs is not the number of pieces, but if the basket strong. If the eggs in one basket, the basket only happen fast rotten or appearance of decorated well, but the quality problems, then the egg is placed inside the basket is very dangerous. By the same token, putting all their eggs in different baskets, but if, unfortunately, is that this group of the basket are all inferior goods, then the egg is no doubt spread to these baskets are futile, but have been placed in a basket by the so change its wiped out everyone in the final break only.
In a bear market, no matter how the funds distributed to the end but just the size of fall. Most good companies is the performance decline only smaller, but still can not change the result of investment losses. In the bull market, it was only the size of the problem increases. Company's share price performance of a good or at best a little bigger, but also difficult to ensure that the varieties with low price-earnings ratio or price-earnings ratio can be greater than the high variety, which increased several times in the past has been done to prove Quotes without more ideas.
Stock picking than the election, several years of depressed market, listed companies will choose to fighting institutional investors do? Carrying a basket or a basket of eggs, walk a few markets in the finance and investment, the key to the weather conditions. Only in the bright sunny weather, no winds and heavy rain, carrying her basket of eggs is enough on safety.
