Spreading money across holdings to reduce concentration
Diversification means not putting your money into one stock or one industry. If something goes wrong at one company, the damage to your whole portfolio stays small. It does not protect against everything: when the market as a whole falls, most holdings fall together.
Put everything in one stock and a 50% fall halves your money. Spread it evenly over ten and the same fall costs you 5%.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.