What Does Diversification Mean? - TheStreet Definition

Dictionary of Financial Terms

A risk-reduction method by which you spread your assets among many different investments. The idea is that if you have some money in, say, a big-cap fund and some in a small-cap, then you'll get the gains of whichever class is outperforming at the time. Another way to think about it: Don't put all your eggs in one basket.

Definitions of Financial Terms