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BTCC / Hashtag / diversification meaning in finance
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What is diversification in investing?

Diversification is the process of spreading investments across different asset classes, industries, and geographic regions to reduce the overall risk of an investment portfolio.

What is diversification & why is it important?

Diversification is a common investment strategy that entails buying different types of investments to reduce the risk of market volatility. It's part of what’s called asset allocation, meaning how much of a portfolio is invested in various asset classes. Three of the most common asset classes are stocks, bonds and cash (or cash equivalents).

Why is diversification important in financial planning & investment management?

Diversification is a very important concept in financial planning and investment management. It is the idea that by investing in different things, the overall risk of your portfolio is lower. Instead of putting all your money into a single asset, spreading your wealth across different assets puts you at less risk of losing capital.

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