Diversification helps manage risk from "summary" of Investing Basics for Beginners by Razaq Adekunle
Diversification plays a crucial role in managing risk when it comes to investing. This concept involves spreading your investments across different asset classes, industries, and geographical regions. By doing so, you reduce the impact of any single investment's performance on your overall portfolio.
When you diversify your investments, you are essentially putting your eggs in different baskets. This way, if one investment underperforms or experiences a downturn, the negative impact on your overall portfolio is minimized. The goal is to create a balanced portfolio that can withstand market fluctuations and volatility.
One of the key benefits of diversification is that it helps to reduce the risk of losing your entire investment. By spreading your money across various assets, you are less exp...
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