What does diversification mean in investing?

Spreading money across different investments.

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  1. Putting all money into one stock
  2. Keeping all cash under a mattress
  3. Spreading money across different investments ✔

Why: Diversification spreads investments to reduce the risk of any single one failing.

Huh, didn't know that: Diversification spreads investments to reduce the risk of any single one failing.

The dad joke
Don't put all your eggs in one basket.
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References

Answer: Spreading money across different investments. Diversification spreads investments to reduce the risk of any single one failing.

  1. Scouting America: Personal Management www.scouting.org/merit-badges/personal-management
    The concept of diversification in investing
    Checked 2026-11-07.

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