Investing in many things reduces the amount of risk that you are taking when making investments. You may choose to open a savings accoung, invest some money in the stock market and purchase some government bonds.
By doing so, you spread out your investment risk. By investing in many different investments, rather than one, you are ensuring that even if a one investment goes wrong, leaving you with loss or low returns, you will still make money on your overall investments.
Making several different investments as a way of reducing overall risk is called diversification. Investors diversify their investments so that no single loss can harm their financial situation in a serious way.
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