What does diversification mean?

Diversification means spreading investments across assets, sectors, or regions so a single loss does not dominate your portfolio.

Quick Definition

Diversification means spreading investments across different assets, sectors, or regions to reduce risk. When one holding falls, others may offset the loss — don't put all eggs in one basket.

Use this concept with tools

DCA

Periodic investing with expected annual return.

Fee Drag

Impact of ongoing fees on final value.

ROI + Annualized

Calculate total ROI and annualized return.

NPV

Discounted cashflow valuation.

Related concepts

What is dollar-cost averaging?

Dollar-cost averaging (DCA) means investing a fixed sum at regular intervals regardless of price. You buy more shares when prices are low and fewer when high, naturally lowering your average cost.

What is the relationship between risk and return?

Higher potential returns come with higher risk — this is the fundamental risk-return tradeoff. Smart investing isn't about avoiding risk; it's about taking only the risk you understand and can afford.