I was recently asked to review a members portfolio as it had lost some 90% of it’s value, all were in the marijuana sector, I don’t believe in diversification for the sake of it, but you still need to have the right company stocks with good long term performance histories, but they should not all be in the same sector, the portfolio value had started with $ 5,000 and had five different company stocks, this meant $ 1,000 had been invested in each stock, this is 20% of the total fund value invested in each stock, you should never invest more than 5% of your total fund value on a single stock, they should have invested a maximum of $ 250 per company stock, this is a very good risk management rule, please adhere to this rule at all times as it will avoid you losing everything, also there was no exit strategy, it doesn’t matter if your exit strategy is if it rains 4 days in a row or if it reaches a loss of 25% then sell, you simply must have an exit strategy before you make the investment.