What Is Diversification?
From the SB Advisors Academy money glossary · Free, no signup
Spreading your investments across many different assets, industries, and asset types to reduce the risk that any single investment ruins your results.
A worked example
Owning only one company’s stock means a bad quarter can destroy your investment. Owning 500 companies through an index fund means one bad company barely matters.
Category
Part of the "Investing Basics" group in the money glossary.