GENERAL KNOWLEDGE

Detailed explanation-1: -Don’t put all your eggs in one basket. That’s the basic premise behind diversification. It is a popular investment strategy that tries to mitigate losses by spreading an investor’s risk across multiple investments and different vehicles.

Detailed explanation-2: -We would all like to have guaranteed high returns without any risk but, sadly, this is not a reality. Instead, it’s essential to manage risk and return together which is why diversification – not putting all your eggs in one basket – is so important.

Detailed explanation-3: -This is a piece of advice which means that one should not concentrate all efforts and resources in one area as one could lose everything. Example: Mr Tan’s financial adviser urged him to be careful and not put all his eggs in one basket by investing all his money on stocks.

Detailed explanation-4: -When it comes to building long-term wealth, diversification is a more reliable strategy. “Put your eggs in different baskets” is the investing equivalent of diversifying your portfolio and spreading out the risk of your investments.

Detailed explanation-5: -Don’t put all your eggs in one basket is a proverb that warns not to invest all of your resources into a single thing because you might lose everything, as in Don’t put all your eggs in one basket by investing your life savings in a risky stock.