Why you need to diversify your investments to make the most of your money

Zain Johnson (in for Africa Melane on 702 and CapeTalk) speaks with certified financial planner Bryan Nicol.

Listen below:

A good financial advisor will always tell you 'not to put all your eggs in one basket.'

Nicol says that the secret to getting the most out of your money is investing for a purpose, which means you will need to diversify your portfolio.

For example, if you are saving for a deposit on a house, you cannot put your money in something volatile, and need to go for something more secure.

“You cannot afford for that money to participate in market turbulence.”

- Bryan Nicol, Certified Financial Planner 

However, if you are saving for retirement, you need something that will grow well in the long run and can be left alone for years.

He adds that if you have a diverse portfolio some of your investments will do well when others do poorly, which can be a cushion when the markets go down.

RELATED: Mastering the Marathon: Secrets to LONG-TERM investing success

When looking at financial performance we often focus on the positive, but Nicol says you cannot ignore the negatives.

Financial success is also about knowing when to let go of a bad investment, he continues.

Scroll up to the audio player for more.