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Diversification
Plain English
Spreading money across different investments so that one bad outcome doesn't sink your whole portfolio.
Professional definition
A risk-management strategy that mixes a variety of assets, expected to have different (ideally uncorrelated) return patterns, within a portfolio.
Example
Owning a mix of stocks across many companies and industries, rather than a single company's stock, is a simple form of diversification.
Common misconception
Diversification reduces certain types of risk, but it does not eliminate the risk of loss, especially in broad market downturns.