Wild riches.
It's okay to admit that's what you dream of when you are putting your hard-earned into ASX stocks.
We all want to end up rich — that's the whole point of investing.
But you need to temper your expectations so that you don't fall for get-rich-quick traps.
Remember, the higher the reward, the higher the risk.
So if you want to balance the chances of you going broke with the probability of becoming filthy rich, you need to construct a diversified portfolio.
Whether it's industry, geography, growth vs dividend, whatever — it is important to not place all your eggs in one basket.
The idea is that some stocks will do well in one year, and others will flop. And, fingers crossed, the winners outperform the losers and you end up wealthier overall.
Having said this, let's take a look at one ASX mining stock that was a massive winner this year.
If you had this one in your portfolio, every other stock you own could have lost, and you would still be cheering:
This year's most explosive ASX mining stock?
As the headline says, let's imagine you bought $3,000 of Wildcat Resources Ltd (ASX: WC8) back when the trading year started.
You would have paid just 2 cents per share.
A couple of days later, the stock rose to 3 cents, meaning a 50% profit already.
Nice.
But then the Wildcat share price just stalled. In early May, it had not changed from 3 cents, not even fluctuating up or down along the way.
And that's when the real fun started.
The mining company started making some promising discoveries, and investors started piling onto it.
By 4 September, the share price had rocketed to 46 cents.
Your $3,000 investment had turned into $69,000.
How good!
But the journey wasn't over. Wildcat Resources shares kept smashing its 52-week high repeatedly after that.
On Friday, the share price was at 74 cents, meaning the $3,000 you put in just 11 months ago is now a whopping $111,000.
Amazing stuff.
I point this out not to make you feel FOMO but to demonstrate how even one wise stock selection can make up for all the losers in your portfolio.
This is why we diversify. This is why we invest.
Good luck out there.
