Explain Tobin's idea of "Don't put all your eggs in one basket."

What will be an ideal response?

Trade in assets can make both parties better off by allowing them to reduce the riskiness of the return on their wealth. Portfolio diversification occurs when the wealth is divided among a wide spectrum of assets, so the amount of money riding on each individual asset is reduced. Obviously, this diversification needs to be contrasted against the expected returns of the new assets that you are acquiring.