[Terr_]

Tangentially, I'd also suggest that you consider your own career-sector as something to be hedged/diversified against. This is especially true for people getting stock-thingies as compensation, but it might also apply for some index funds.

The worst-case scenario that comes to mind are all the Enron employees who focused their 401ks onto their own employer's hot stock, and then the implosion wiped out both their regular earnings and their reserves.