What is Diversification?
Diversification means spreading your money across many different investments instead of putting it all in one place. The idea is that if one holding falls, others may hold steady or rise, so the whole portfolio is less dependent on any single bet. Diversification can reduce some risk, but it does not remove risk entirely and it does not guarantee a positive result.
Why Diversification matters
It is one of the simplest ways to avoid having one bad holding sink an entire portfolio.
Related terms
Lessons that use this term
Continue