6. I Can Diversify Endlessly

Getting the just-right amount of diversified portfolio is perhaps the toughest decision an investor has to make but (s)he needs to draw a line somewhere. Diversifying too restrictively or endlessly can both be injurious to the portfolio of an investor. The trick is to have just the right balance of stocks, mutual funds and FDs. For very new investors’, bank or company FDs are good bets. They can slowly diversify into blue-chip stocks. They can further diversify their investments by investing in related stocks, like from Tata Steel to Tata Motors stocks. But keep the investment pace slow.