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GOLDEN RULE OF INVESTMENT

•Diversification

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What is Diversification in Finance?

• Risk Management Technique

Mix a various investments into a portfolio, spreading out of investments to reduce risks

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Why Investors Need Diversification?

To protect yourself against downturns

To take maximum advantage

of market conditions

Two Major Reasons

1 2

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How to Make Diversification?The portfolio pyramid

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How to Make Diversification?Asset allocation

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Case I: Bankruptcy of LEHMAN BROTHERS•Investment banking•Equity and Fixed-income sales•Research and trading•Investment management•Private equity •Private banking

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Case I: Bankruptcy of LEHMAN BROTHERS•CDS, 1995•CDO•613 Billion $ Debt

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Case II: Imbalance make global recession

•Imbalanced world •$$$ is the “global currency”•Money fly into US, Economic leading country•Crisis share to global

World need diversification!!!

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Don’t forget in 2010:•Still in trouble•Sensitive•Inflation is coming•Diversification if investment (Half)•Reasonable Saving (Half)•Earn more money•Spend more money

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Thank you !&

Happy New Year!