Learn / Glossary / Diversification
GlossaryWhat is Diversification?
Diversification means not putting all your eggs in one basket.
The simple explanation
Spreading money across different companies, industries and types of investments means one bad outcome hurts less. It does not remove risk, but it softens it.
An example
Owning stocks in tech, healthcare, banking and food is more diversified than owning five tech stocks.
Why it matters
It is one of the most widely repeated ideas in investing.
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Educational information, not financial advice.