Investing Basics Beginner

Diversification

💡 In plain English: Don't put all your eggs in one basket — spread investments across many assets so one bad one doesn't ruin everything.

Definition

Spreading investments across different assets, sectors, and geographies to reduce the impact of any single investment performing poorly.

📌 Real-World Example

Instead of putting ₹10L all in IT stocks, you split it: ₹3L IT, ₹2L banking, ₹2L pharma, ₹2L bonds, ₹1L gold. Even if IT falls 30%, your portfolio drops only ~9%.

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Related Terms

Asset Allocation
How you split your money across different types of investments —...
Rebalancing
Periodically adjusting your portfolio back to your original target...
Index Fund
A fund that simply copies a market index like Nifty 50 — no fund...
Volatility
How much a stock's price swings up and down — high volatility =...
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.

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