Diversification is an abstract concept, it can be easy to understand why to diversify, but not how. True diversification requires each set to be completely unrelated (no correlation). In other words, if one effort fails, the negative effects do not harm others. This ideal is generally impossible, as all things are linked to some degree, but it is certainly possible to keep the effects of any one catastrophe to one or two groups.
To start, create a simple cap for each investment group, a number small enough that it wouldn’t ruin your life to lose the entire value. Many will argue based on percentages, but that number fluctuates constantly, and doesn’t account for your psychology. For example, you could put no more than $25k into any set. This is the minimum buy-in for many investments, and plenty high for most of us.
