What Is Diversification?
Definition and plain-English explanation of "Diversification"
Diversification is the strategy of spreading investments across different assets, sectors, and geographies to reduce risk. If you own 30 stocks across 10 sectors, a collapse in one company or sector has a limited impact on your overall portfolio. The classic saying is 'don't put all your eggs in one basket.' However, over-diversification can dilute returns.
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