Portfolio diversification is the practice of selecting a collection of investments that have dissimilar risk-return characteristics.

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Portfolio diversification is all about spreading your investments across different asset classes, industries, and geographies to reduce overall risk. This is done by selecting investments that have different risk-return profiles to create a diversified portfolio. By doing so, any losses from one investment can be offset by gains in another, helping to reduce overall portfolio volatility.

Portfolio Diversification Is the Practice of Selecting a Collection of Investments