Why it is important for you to spread your money around? (Diversify your portfolio in $ langauge)

Who knows what will happen at the beginning of the year? This year if you put all of your money in Japan you would have made 50%. On the other hand if you bought the Gold Miners you would have lost 50%!! At the beginning of last year many “smart” people thought the opposite would happen. Oh Well!!  The old adage still applies. Do not put all of your eggs in one basket. Take a look at the chart below. If you would have spread your money around, you would have had winners and losers but would have made out just fine. Avoiding big mistakes is how you make money.