Money & WorkMental model

The only free lunch in investing.

Diversification means spreading money across many assets that don't fall at the same time. If a company goes bankrupt, you lose everything with one stock but 0.1% with 1,000 stocks. The expected return stays the same; only the volatility drops. Spread across industries, countries and asset classes, because ten car stocks aren't real diversification.

Useful: For every investment, ask: what happens to the rest if this one fails?

Source: en.wikipedia.org

Investieren RisikoStrategie

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