Diversification

Diversification means not putting all your money into one investment.
By owning a mix of stocks, bonds, and other assets, you protect yourself if one performs poorly.

Why it matters

• Reduces the impact of a single asset’s decline.
• Helps balance risk and reward.
• Creates more stable long-term growth.

Example

If you invest only in one company and it struggles, your portfolio suffers.
But if you own shares in multiple companies across different industries, losses in one area may be offset by gains in another.