Spreading investments across assets so no single failure sinks the portfolio.
The classic case for it: individual stocks can go to zero; a diversified index fund holding hundreds of companies effectively cannot. Diversification reduces risk without necessarily reducing expected return.
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FAQ
What is Diversification in simple terms?
The classic case for it: individual stocks can go to zero; a diversified index fund holding hundreds of companies effectively cannot. Diversification reduces risk without necessarily reducing expected return.