Putting all your wealth in one basket means investing or storing all your money in a single place, like one particular stock, bond, or any other investment type.
This can be risky because if something goes wrong with that particular investment, you could lose everything you’ve put in.
Imagine you have a basket where you keep all your eggs. If you drop the basket, all the eggs will break, and you’ll be left with nothing.
The same goes for your wealth. If you put everything into one investment and it doesn’t go well, you could lose everything.
Instead, it’s smarter to spread your wealth across different investments or assets. This is called diversification.
By spreading your money out, if one investment doesn’t do well, you won’t lose everything because your other investments can help balance things out.
So, the lesson is: Your investments may not do well or perform poorly all at the same time. Therefore, diversify your investments to reduce the risk and protect your wealth for the long term.
