Lesson Content
Every investment carries some level of risk. Stock prices can change due to economic conditions, company performance, global events, or investor emotions.
To reduce risk, investors use diversification. Diversification means investing money in different companies, industries, or asset types instead of putting all money into one investment.
Example of diversified investments:
- Technology stocks
- Banking stocks
- Healthcare stocks
- Mutual funds
- Gold investments
Diversification helps balance losses and improves long-term investment stability.