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As a banker, I was once asked to make a loan to a businessman who owned nothing except one stock worth $2 million, but he owed $1 million against that stock.
I was surprised by his lack of diversification. I declined his loan request.
Later, that stock plummeted and he was forced to sell with a deep loss.
Jesus began a parable by stating that a master entrusted his wealth to three servants. In Matthew 25:15, we read, “To one he gave five bags of gold, to another two bags, and to another one bag, each according to his ability.”
The master wisely diversified his riches by spreading them to three different stewards, according to their skill. In our investments we would be wise to diversify as well.
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