Final answer:
Diversification is the term that best represents the statement. By diversifying a portfolio, investors can reduce risk and potentially mitigate losses.
Step-by-step explanation:
The term that best represents the statement is Diversification. Diversification is the practice of buying stocks or bonds from a wide range of companies rather than focusing on a single stock.
By diversifying, an investor spreads their risk and reduces the potential impact of unfavorable conditions or decisions on a single company. In this case, if a trade is missed on one stock, the investor can go to a stock in the same category to possibly make a play, mitigating potential losses.