Financial Terms Glossary
The most important financial terms - with simple and concise explanations.
Diversification
Diversification means spreading your risk when investing money. As the saying goes: don’t put all your eggs in one basket. As a practical example, this might mean selecting assets across different asset classes and/or regions to mitigate overall portfolio risk. The result is that the loss of one investment can be, at least partially, offset by the gain of another.