The year 1998 proved to be one of the most volatile financial years in decades and taught us many lessons. Interest rates slid to the lowest levels in recent memory. They invest this way in order to avoid a temporary loss. Unfortunately, permanent loss occurs instead because of lack of growth, erosion of purchasing power, and outliving their retirement resources.
Greedy investors are even worse off.
Diversifying works because the value and return of different investments often rise and fall independently of each other. As you get older, gradually reduce your exposure to equities but still diversify. Invest with those who consistently perform in the top 25 percent. Do not pick last year's biggest performer as they are probably due for a big correction. Some investment managers invest only in large companies.