Diversification is always been recommended if your budget permits you but if not or only limited then its up to your own choice because success in investment will really vary on how you do handle up yourself on these kind of situations.
Yeah, there are lots of factors we need to consider before diversifying our portfolio. Budget must be the first criteria but people go for arranging new fund for the reason of diversification but they should start investing from the beginning by keeping diversification in mind. But, people do buy bitcoin for $1000 and then think about diversification then going for new funds for altcoins to diversify their portfolio which may not eliminate the risk but will add up another layer of risks.
After budget, investor must take time to find real potential coins while diversifying. But, most new investors choose random coins just for the reason of not investing in one or same coin which eventually ending up in investing in shitcoins.