Finances · Glossaire
What is Diversification?
Définition rapide
Spreading investments across different assets to reduce risk. The only "free lunch" in investing.
Explication complète
Diversification is the strategy of holding many different investments so a loss in one does not devastate the portfolio. The math behind it: when one asset zigs, another often zags, and the combined volatility is lower than either alone. A portfolio of 30+ stocks across different sectors has dramatically less risk than a single stock. Diversification works at every level: across stocks, across asset classes (stocks + bonds + real estate + cash), and across geographies. The extreme is an index fund, which holds thousands of companies at near-zero cost. Diversification cannot eliminate market risk — only specific (idiosyncratic) risk.
Calculatrices liées
Calculators that use or explain Diversification.
Termes liés
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Last reviewed: June 15, 2026 • Category: Finances