Diversification in investment is primarily about:

Diversification in investment is fundamentally about spreading risk across multiple asset categories. By allocating investments among various asset classes—such as stocks, bonds, real estate, and cash—investors can reduce the impact of any single investment's poor performance on the overall portfolio. This strategy helps to mitigate risks since different assets often react differently to market conditions. For example, when stocks may be underperforming, bonds might be doing well, thus balancing the investment performance overall.

Diversification takes advantage of the different risk-return profiles of various asset categories which can lead to more stable overall returns. It is a key principle in investment management that allows investors to pursue their financial goals while managing potential risks effectively.