Here’s the most common mistake made by investors

Here’s the most common mistake made by investors

And how to avoid it

Here’s the most common mistake made by investors

Harry Markowitz, the American economist who won the Nobel Prize for Economics in 1990, warns against one of the most common mistakes made by investors: concentrating investments on a small number of securities.

The best way to maximize profit while decreasing risk, is to allocate investments across different types of securities.

Be aware, tough, that diversification in investments does not give the guarantee of a sure success, rather it helps limit risks and buffer losses.

One should always bear in mind that there is no perfect investment: every investment has its merits and flaws. With this in mind, no financial instrument is the only one in which to invest your savings.

The watchword is therefore “diversify”. But how?

Although it is now clear that it is wiser to invest on an index (within which there is a large number of stocks), rather than on the single company, there still are two knots to unravel:

–         which financial instrument allows you to buy an entire stock market index?

–         which index should you buy?

To know the answers to these questions read the book One Million for my Daughter https://onemillionformydaughter.com/