Economics Financial Markets Questions
Diversification in investing refers to the strategy of spreading investments across different assets or securities in order to reduce risk. By diversifying, investors aim to minimize the impact of any individual investment's performance on their overall portfolio. This is achieved by investing in a variety of assets such as stocks, bonds, real estate, commodities, or international markets. Diversification helps to mitigate the risk of loss by ensuring that if one investment performs poorly, the impact on the overall portfolio is minimized as other investments may perform well.