Why super funds diversify and what you can learn from it

It’s a common saying that you shouldn’t put ‘all your eggs in one basket’ and it’s particularly true when it comes to your finances.

Although it’s a lesson many smaller investors and super savers forget, it’s one thriving super funds – both large funds and SMSFs – always follow.

So, why are the people who run successful super funds so committed to diversification and what are the lessons all super members can learn from it?

Diversification: What is it and why does it matter?

When it comes to the practice of investing, diversification is a fundamental rule for anyone wanting to protect their investment portfolio against unpredictable markets.

Put simply, diversification is the process of splitting your money across a range of investments and asset classes to receive returns from different sources. It also helps ensure if things go wrong with one particular business or asset class, you don’t lose all your cash.