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Diversify your investments to reduce risk from "summary" of The Little Book That Beats the Market by Joel Greenblatt
Diversification is a simple concept that can help investors reduce risk. By spreading your investments across a variety of different assets, you can protect yourself from the potential negative impact of any one investment performing poorly. This means that if one of your investments does not perform as well as expected, the impact on your overall portfolio will be minimized. The idea behind diversification is to avoid putting all of your eggs in one basket. If you invest all of your money in one stock or sector, you are exposing yourself to a higher level of risk. If that stock or sector experiences a downturn, you could stand to lose a significant portion of your investment. By diversifying your investments, you can spread this risk across different assets and reduce the likelihood of suffering large losses. Whi...
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