Managing Risk With Diversification

When you first considered investing, it probably seemed like a good idea to focus heavily on what worked best for you from the beginning. If stocks from a particular company brought you high yields, why not double up on your original investment? The answer is diversification. It may seem counterintuitive, but diversification is a fundamental aspect of risk management, and plays a critical role in building an investment portfolio.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.​