Why is diversification important?

Article author
Alexander G.
  • Updated

Diversification means spreading your money around different types of investments so you don't put all your eggs in one basket. Here's why it's important to diversify:

  • If one investment doesn't do well, it won't hurt all your money because you have other investments too.
  • Different types of investments might do well at different times, so you have a better chance of making money overall.
  • It helps make sure you're not taking too much risk with your money.

Just remember, even if you spread your money out, there's still some risk involved. But diversification can help you handle it better.

To find out more about how diversification works, check out Learn in your Acorns app.

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