from Let It Dough! by Christoph Niemann (NYTimes)
You can invest in lots of different things – stocks, bonds, mutual funds, currencies, cows. (For real! They’re called commodities and they’re really weird.) And you can invest in this stuff in the U.S. or in almost any country in the world.
But here’s the trick: you want to have a diverse mix of all these things, so you don’t lose all your money if, say, the U.S. economy crashes or all the cows go on strike.
Diversification is a way to reduce that risk by creating a portfolio with a wide mixture of different investments. In basic terms, it means “don’t put all your eggs in one basket.”
Mmm. Sprinkles.