A lack of adequate diversification is one of the most common investment mistakes made by novice and experienced investors alike. This is ironic because most successful investors and reputable financial advisors will tell you that this is the single most important rule of investing. It can be hard to know how to adequately diversify your investments, especially if you don’t have a lot of cash to work with. But no matter how much (or how little) you have, it’s still important to avoid putting all of your eggs in one basket. If you have a small amount to work with, just split it up – putting the same percent of the total into each of the investments you have selected. Another important component to diversification is working to make sure that you remain diversified. What I mean by this is simple – if one position does a little better than the others in one quarter, you will need to rebalance your portfolio. Portfolio rebalancing is the process of bringing the different assets back into the proper relationship following a significant change in one or more. To put it more simply, it is the act of returning your portfolio to the proper percentage mix of stocks, bonds and cash that you started out with in your personal financial plan.Finally, don’t get caught up in the excitement of one security that’s doing really well. While owning the stocks of successful companies can really help strengthen your portfolio, remember that reward usually comes with risk, and putting too much of your hard earned cash with one company can really take its toll.