Never put all eggs into one basket is one investment strategy. We can invest in Forex, Gold, Property, Stock but never put all yours money into just one group of investment. Separate some to stock market, some property. However, never be over diversified which will make you loss focus.
Diversification will help us to reduce the risk.
For small capital investor, unit trust is an option as it polls many investor monies to invest in different sector of stock market by professional fund manager. This is the advantage of diversification of unit trust.