Why is diversification important?

Diversification is important because it helps you manage investment risk. By diversifying your portfolio, you can:

• Lower the impact of any single investment performing poorly
• Benefit from the performances of different kinds of investments or sectors
• Potentially improve the risk/reward ratio of your portfolio

Remember — diversification won’t eliminate risk entirely, but it can definitely help manage it.

For information on the Diversification Score, and how it works, please go to this article.