Diversification or Specialization ?

d0zer(60)
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Diversification of course.

You have to be really stupid to invest all your money into 1 coin. This goes for traditional stocks as well. You could be absolutely positive that your coin is going to be the next best thing. You could have done all your homework perfectly but there will always be things you can't predict. Take a black swan event for example. Something that would come as a big surprise and have a major impact on your coin. Like Bitcoin being hacked. That would crush most of the crypto market. You always need to assume the worst could happen. 

That said, too much diversification is also a bad thing to do. One of the biggest investors of all time, Warren Buffet, once said that over-diversification is something for people that do not know what they're doing. This could decrease your return on investment. It is a mistake a lot of people do and most of time don't know they're doing it.

Like most things in life, you need to find a balance. In this case, a balance between your return on investment and controlling your risks. Investing isn't hard. Anyone can do it. But to control your greed...that's something most of us will fail. 

Diversification or Specialization ? | Ecency