David's portfolio only consists of two big stock positions. Both are in the same industry, and the government just announced tariff sanctions in this sector. This news has had a negative impact on markets which will result in job losses in this industry.

Which statement would have been a better strategy for David?

1. David should have invested in safe and liquid assets, assuming that he is in the early stage of his career.
2. David should have invested all of his money in term deposits.
3. David should be taking a more aggressive approach to his investment strategy.
4. None of the responses.
5. David should have invested in a portfolio with a set of multiple investments allocated across different assets, sectors and industries.