General

Diversification

Also known as: Risk Spreading, Portfolio Distribution

Investment strategy of spreading money across various assets to reduce overall portfolio risk.

Detailed Explanation

Diversification is the practice of not putting all eggs in one basket by investing across different asset classes, sectors, geographies, and time periods. It helps reduce unsystematic risk while maintaining potential for growth. A well-diversified portfolio might include equity, debt, gold, and international investments across various sectors and market capitalizations.