So what is diversification?

When people speak of diversification, they generally refer to the act or process of placing investments on various types of assets in different proportions. When you are making an investment, you generally consider various factors like your tolerance for risks, personal finance goals and time map.

Diversification, by itself, is not an assurance or a guarantee against risks and potential losses. However, this approach helps in significantly alleviating or minimizing the risks from speculative investments. You can offset the loss from one investment with the gain in another.

Now, why should you diversify?

Diversification is not only advisable, it must be mandatory if you are an investor. If you would like to ensure your money’s safety, you need to diversify.

There are various reasons why you should diversify. First off, diversification is a way to ensure a long-term investment return. It is a good way to maintain your long term investments. You minimize the risks on volatile investments and undervalued assets. You can say that the when you diversify you minimized your risk exposure level. You also temper the volatility of hot asset investments as well as the unpredictability of the market. With diversification, you can offset your losses, participate in the upside of some investments and mitigate the downside on other investments.

You however need to be careful with the investments you are diversifying into. Seek the advice of a trained profession when making any kind of diversification decisions.

Google, Inc aka GOOG jumped above $500 in early morning trading today and looks like it’s going to close above the $500 mark as well. That’s right, it’s nearly 6 times what it was when they wen public in 2004 and with all the aquisitions it’s making, it doesn’t look like it’s going to stop anytime soon.

Well I guess this could make you money. If you think there is a chance this titan will tank, sell short, if you think there’s a chance, and word on the street is that many analysts say this is fully possibly, that the stock will keep right on going past $600 then buy it.

The price is a little too rich for my blood, but then again I always wanted to buy Berkshire Hathaway when I was in middle school and the price was at $900 a share. If I would have bought one share back then, in the 12 years since I could have payed off almost all of my student loans with that money.

Hmmm, maybe I should buy just one share?

Maybe we should all just buy one share. Does anyone know if these Google guys idolize Warren Buffet?