GlossaryBeginner
Diversification
Spreading holdings across different assets rather than concentrating in just one.
Diversification means spreading holdings across multiple different assets, rather than concentrating everything in a single one, as a general risk-management concept.
This is a general educational concept, not personalized investment advice; how and whether to diversify depends on an individual's own circumstances, goals, and risk tolerance.
Examples
- Holding several different assets instead of one is a basic example of diversification.
- Diversification can reduce the impact of any single asset performing poorly, though it doesn't eliminate risk entirely.