Question

Diversification is important in investing because... ait helps you to balance your risk across different types of investments. bit increases your overall risk, which guarantees that you will make more money. cit ensures that you only make low-risk investments. dit helps you gain the highest rate of return despite any risks.

Answer 1

It helps you to balance your risk across different types of investments.

Answer 2

Diversification is important in investing because it helps you to balance your risk across different types of investments. When you diversify your investments you are at a better advantage when it comes to profiting because of the potential risk of losing as well. When you spread yourself out within different investments you have more opportunities because if you put all of your money in one investment the odds of losing everything in one swoop are just as much as profiting. When you spread it out, there are multiple ways some with high risk and some with low risk you are able to try and create a return on your investment. Maximizing your diversity is a great rule to follow.