Diversify how to/What does it really mean

Diversification essentially means don't put all your eggs in one basket.  What does that mean to you and your investments? Are you diversified if you hold more than one security?

The answer is yes and no, you should hold more than one, but you have to be in different industries to really be diversified.

For example IBM and Microsoft are both Tech companies, and Exxon and Chevron are both oil companies (called energy companies in finance).

So pick one of each and make a portfolio in different sectors like: Defense; Pharmaceuticals; Tech: Energy, Industrial, Telecom, and so much more

Diversity protects from sectors going down.  Sometimes the whole market goes down and there are ways to protect yourself in those times too.

Depending on what you want to do allocate your money by %.  Make each holding 5-10% of your total money and no more than 20%.  There are exceptions to every rule be safe and research allocations that will help you achieve your goals while limiting risk.

One good way to start out is pick five solid companies that have a good yield on their dividends and allocate your money evenly among these companies.  Disperse new funds evenly over time between all these positions.

I do not own any companies in this article.

This is a very basic thought on diversifying more posts on this topic coming soon.

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