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Taking stock: diversification really is key

Tom Stevenson

Tom Stevenson - Investment Director

Important information: even though this is just a game you must remember that the value of investments and the income from them can go down as well as up, so you may get back less than you invest. 

With the  Share Picking Game well underway, I take my hat off to both Anne Hegerty and Shaun Wallace, the quizmasters who bravely offered to place their portfolios under the spotlight for us. Both are safely in positive territory with their selections.

Both Anne and Shaun are demonstrating the value of diversification, with one or two really strong performers more than making up for some less successful picks. It really does pay to put your eggs in a variety of baskets when it comes to investing.

I am going to draw a veil over my own efforts in the game so far. In my defence, I would say that to win a game like this you have to go out on a limb. Unfortunately, the limb I chose to go out on was the wrong one, with the benefit of hindsight. Backing shares which had fallen heavily in the hope that they would bounce back was the wrong strategy!

I hope this light-hearted introduction to investing has encouraged a few people to look more closely at how the stock market can become a part of their long-term financial planning. There are no guarantees in investment, but over the long haul shares have been a great way for people to participate in capitalism’s great wealth-creating potential.

And I hope that the combination of This is Money’s great insights and information, and Fidelity’s share dealing platform will continue to help many more people get the most out of their investments in the future.

Find out more about our latest share news, views and insights here.

Important information: Direct shareholdings should generally form part of a well diversified portfolio of other investments. This is not a personal recommendation for any particular investment. If you’re unsure about the suitability of an investment, speak to an authorised financial adviser. Investors should note that the views expressed may no longer be current and may have already been acted upon. Based on share picks at time of going to print.

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Test your share picking skills for the chance each week to win a £500 cash prize. Game ends 4 Dec. T&Cs apply.

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