Thursday, September 4, 2008

Don't Put All of your Eggs in One Basket


Don't put all of your eggs in one basket applied a lot to me in the stock game. One example of this was because I often bought a lot of shares from only one or two different companies. This meant that if that company's stock drops, all of my stock does too instead of only a few shares.  This is very risky because all of your stock could drop very quickly. Something I did during the game that is a good example of this clue/proverb was when I bought 13 shares of silver and 8 shares of rail road near the end of the game. I relied to heavily on silver and it dropped, I lost a lot of money. One way to stop this is by balancing your investments over several companies so that if one drops, all is not lost.

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