Investing strategies: Here's why portfolio diversification is important

Most investors tend to focus on keeping their savings in a particular investment or asset class. For some investors it is gold, for some, it is fixed deposits and for others it is stocks. However, concentrating your savings in one asset is a risky proposition. If the investor’s favorite asset gives poor returns, then his efforts at wealth creation would face a setback.

Diversified investment portfolio aims to prevent such an outcome by spreading his investments among different assets and investments. The idea is that the higher returns from some investments would offset lower returns from other investments. As a