Investor Education
Diversification
Diversification is the practice of spreading exposure so that a single company, sector, asset class or theme does not dominate the entire portfolio outcome.
Across asset classes
Equity, fixed income, cash and other permitted exposures can behave differently across market environments.
Within asset classes
Owning many stocks is not necessarily diversified if they share the same sector, size, factor or geographic exposure.
Correlation
Diversification benefits depend partly on how investments behave relative to one another, especially during stress.
Rebalancing
Over time, market movements can cause allocations to drift away from the intended structure.
Limits
Diversification can reduce specific risks but cannot eliminate broad market risk or guarantee positive returns.
Risk disclosure: All investing involves risk, including loss of principal. Diversification and asset allocation do not guarantee a profit or prevent loss. Past performance does not guarantee future results.