Diversification is one of the most fundamental principles of investing. It’s a strategy designed to reduce risk by spreading investments across different asset types, industries, or geographic regions. The idea is simple: by not putting all your eggs in one basket, you minimize the impact of any single investment losing value.

A well-diversified portfolio might include a mix of stocks, bonds, real estate, and other assets, each with different levels of risk and potential return. This approach helps protect against market volatility and provides more stable long-term growth.

But do you know what it truly means to diversify your portfolio? Let’s put your investment knowledge to the test!