Finance Library
InvestingBeginner 4 min read

Diversification

Why spreading your bets is the only free lunch in investing.

A diversified portfolio spreads risk across many sectors.

What it is

Diversification means owning many different investments so that no single bad outcome can wipe you out.

Why it matters

Even great companies can collapse. Spreading money across many companies, sectors, and countries means the winners more than make up for the losers over time.

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