New investors still needs to diversify and stay informed because it’s crucial to managing risk effectively. Most of the no coiners have regretted heavily of not investing long time ago, they should know that regret over missed opportunities is common in life. They should see now as an opportunity to start there investing journey, focus on the present and future because will keep rising and other cryptocurrencies.
I don't see diversification as a good practice in this crypto space because aside Bitcoin, their is no other crypto that is as reliable as Bitcoin, because Bitcoin has proven beyond reasonable doubt that it always recovers even when it dips in price, so it's safe to invest in Bitcoin only.
But if you are hell bent on diversification, then it should only be considered when you have gotten to that over accumulation status, and you should not be diversifying into alt or shit coin, but you should be diversifying into land or real estate, so you must get to that over accumulation status first before thinking of diversifying, if not, it's a wrong way to invest in Bitcoin.
If by diversification you mean taking capital or profit to buy altcoins/shitcoins then you're getting it wrong, Bitcoin is decentralized and it has potentials to always reach ATH, something that shitcoins are not. Bitcoin is a store of value that has proven that it'll continue to be profitable to it's holders on the long term and that is why it's advisable not to worry about short term dump and pump.
If you're on Bitcoin investment for the long term you will understand that there's no reason to worry about current price. When it dip you can increase your accumulation, when it recovers and rallies you're in profit, it's a win win for you. This is why DCA method is highly recommended for investors that have long term investment goals, keep buying till you reach your future target.
Honestly speaking I think there is nothing wrong with diversification if you have accumulated a large amount of Bitcoin probably talking about 10-12 years and you've gotten to a level where you feel that you have gotten to over accumulation and then you feel there is need for other things, it's not like you're taking all your investment in Bitcoin, And you're not diversifying into shitcoin which is a very dangerous thing to do considering that shitcoin depends on Bitcoin to thrive, so in my opinion for someone that is a newbie and you've not gotten to a level of achieving your goal of accumulating for 4-10 years depending on the time frame you have set for yourself and your own definition of long term holding, a newbie doesn't have any business with diversification that would mean that you don't have confidence in Bitcoin investment and you will definitely have a divided attention. Right now that I'm in my accumulation stages I don't feel like I have any reason to be thinking about diversification. Instead should be thinking about continuous accumulation and going crazy with aggressive accumulation.