{"id":1506,"date":"2019-11-10T12:16:00","date_gmt":"2019-11-10T12:16:00","guid":{"rendered":""},"modified":"2023-03-27T12:05:30","modified_gmt":"2023-03-27T12:05:30","slug":"financial-disease-too-many-or-too-less","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/financial-disease-too-many-or-too-less\/","title":{"rendered":"Financial Disease 2: Too Many or Too Less"},"content":{"rendered":"
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Hey, how much do I need to invest?<\/p>\n\n\n\n

And what can lead to Financial Disease?<\/p>\n\n\n\n

This turns out to be the most common questions.<\/p>\n\n\n\n

Let me start with an adage by the famous investor Warren Buffett. In one interview, he said that \u2018Wide diversification is only required when investors do not understand what they are doing.\u2019 <\/p>\n\n\n\n

How true is this! In the parlance of investing, especially for first-time or novice investors, believe that equities are risky. However, risk comes from not knowing what we are doing.<\/p>\n\n\n\n

And when an investor is not aware of where to invest, why to invest, when to invest and how to invest, the result is often over-diversification or under diversification.  This happens when an investor is not informed about their goals, risk appetite<\/a> or right methodology; they tend to invest randomly.<\/p>\n\n\n\n

Financial Disease<\/h2>\n\n\n\n

Let\u2019s have a look at what is over-diversification and under diversification.<\/strong><\/p>\n\n\n\n

Over Diversification<\/strong>
Meaning<\/strong><\/p>\n\n\n\n