Diversification is an investment strategy. Instead of investing in one or two companies, various investments are made in different types of securities, markets, and asset classes. You could diversify in the stock markets by investing domestically or internationally or by investing in multiple industries. You could also invest in different types of assets such as bonds, commodities and securities.
Holding a diversified portfolio is likely to be less risky and reduces the impact of market changes. Having said that, you are likely to have to spend more time and money managing your portfolio.
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